A total of $ 1.7 billion in Ethereum (ETH) Recordings of Decentralized Finance (Defi) protocol Aave in the past week have caused considerable market volatility.
This step by gigantic investors significantly reduced liquidity on the platform and briefly pushed the loan rates above 10%.
Although this increase in the short term meant profit for users who deposited their Ethereum to borrow Aave, it turned into a complete crisis for investors who implemented strategies to increase their Ethereum strike yield, called “looping”.
Lusing -investors earned profit by investing Ethereum that they had borrowed at low interest rates. However, a sudden rise in interest rates made this strategy unprofitable and led to losses. As a result, many investors quickly closed their positions and began to record their Ethereum through suppliers of liquid deployments.
With these developments, the outflow drive from the Ethereum network has reached a record high. According to data from Beaconcha.in, the amount of Ethereum that waited not to have risen from Wednesday had risen to 627,944 (around $ 2.3 billion). The network takes approximately 11 days to process this volume transactions.
The majority of the recordings were reportedly from a few large investors. Aave -developer Marc Zeller said he believes that cryptocurrency billionaire and Tron founder Justin Sun is behind these transactions. Zeller noted that Zon often drains deposits and withdraw large amounts of money from Aave and that his behavior is unpredictable.
Wallets associated with Sun on the Arkham platform have withdrawn $ 646 million on Ethereum from Aave for the past three days. In addition, a wallet from HTX, the crypto exchange for which Sun is a consultant, has withdrew the last week for a net for $ 455 million in ETH.
Wallets attributed to Sun still have $ 80 million on Ethereum on Aave, according to Arkham data. Sun refused to comment.
Not only large investors, but also smaller funds such as London -based Abraxas Capital Management have withdrawn ETH from Aave. Abraxas attracted $ 115 million to Ethereum last week.
*This is not investment advice.
