The post USDT Rates Spike on Aave After HTX-Linked Addresses Withdraw Liquidity appeared on BitcoinEthereumNews.com.

Interest rates on Aave’s USDT pool jumped above 10% after wallets linked to crypto exchange HTX pulled hundreds of millions in liquidity, exposing fragility in the DeFi lending market. Aave’s USDT lending market experienced a sudden spike in interest rates, driven by activity from a small group of closely connected wallets, raising concerns about liquidity concentration and the fragility of decentralized finance (DeFi) systems. USDT Borrowing Rate on Aave On July 16 and 17, Aave’s USDT supply APY surged from typical low single digits to nearly double digits, with borrow rates briefly topping 11%, a level last seen since January 2025. Aave’s interest rates adjust automatically based on a lending pool’s utilization rate: when large wallets withdrew hundreds of millions of USDT, the pool’s utilization rate surged above 90%, leaving fewer tokens available for new borrowers and pushing rates sharply higher. While it’s unclear who exactly caused the spike, some suggest it mostly comes from a small number of addresses linked to HTX’s “Recovery” wallet and a secondary account, according to an analysis of onchain data shared by an anonymous on-chain observer known as Deso on X. Amid the on-chain activity, liquidity in Aave’s USDT pool plunged, with some estimates suggesting that available liquidity briefly dipped below $150 million at the peak of the volatility. Data from Parsec shows that HTX’s wallets withdrew nearly $900 million in USDT from the Aave pool during the same timeframe. Whales Dominate DeFi For a sense of how much influence HTX’s wallet has, it has moved over $3.6 billion through the USDT pool in the past 30 days. As of press time, it holds more than $1.7 billion in USDT on Aave — over 32% of the pool’s total reserves — making it the largest single liquidity provider. Fund Flows – Parsec In a…

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Filed under: News - @ July 21, 2025 1:30 pm