Aave Records Over $5.4 Billion in Withdrawals After rsETH-Collateral Borrowing Incident

BlockBeats reported that Aave’s USDT borrow APY rose to 14.99% and deposit APY to 13.39% after more than $5.4 billion was withdrawn following alleged rsETH-backed borrowing tied to a KelpDAO hacker.

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Summary

Aave saw more than $5.4 billion in withdrawals after a KelpDAO hacker allegedly used illegally minted rsETH as collateral to borrow large amounts of ETH, according to BlockBeats. The latest update adds that Aave’s USDT borrow APY climbed to 14.99% while the USDT deposit APY reached 13.39%, indicating tighter liquidity and elevated borrowing demand in the protocol after the outflows. Earlier reported withdrawals by Sun Yuchen and the shift of lending activity toward Spark remain part of the broader market impact described in the topic.

Terms & Concepts
  • rsETH: A liquid restaking token representing staked Ether that can be used across decentralized finance applications, including as lending collateral.
  • Collateral: Assets deposited to secure a loan; if accepted by a lending protocol, they allow users to borrow other tokens against that value.
  • APY: Annual percentage yield, a standardized yearly rate used to express borrowing costs or deposit returns in lending markets.