Aave's USDT lending market faced a sudden shock after a massive withdrawal by a large investor linked to HTX (formerly Huobi). This whale pulled out 93% of the pool's USDT liquidity, causing immediate strain and effectively locking other large depositors in place since most of the USDT had already been loaned out.
The wallet, identified as belonging to HTX, withdrew $400 million worth of USDT in a single transaction. This dramatic move temporarily drained the liquidity of one of Aave’s main pools. As a result, USDT borrowing rates surged due to the spike in utilization, briefly pushing annualized yields as high as 40%. While lenders saw impressive returns, they were unable to withdraw their funds due to the lack of available USDT.
The sudden drop in liquidity was partially offset when new depositors quickly stepped in to take advantage of the inflated yields. On-chain data showed HTX had been reallocating USDT across multiple wallets over the past week, possibly preparing for strategic moves or bridging liquidity across networks. In the past, wallets tied to Justin Sun have carried out similar operations, moving USDT between Ethereum and TRON through Binance.
Within just 24 hours, Aave V3's available USDT liquidity shrank by more than $307 million. Despite the sharp decline, HTX still holds a major share of the pool, retaining around $1.2 billion in deposits—roughly 32.6% of the total.
Initially, borrowing rates jumped to 28.6%, while deposit yields climbed to 24.65% annually. These figures began to normalize within half an hour, dropping to around 8%, which still represents above-average returns.
A tweet from on-chain observer @ai_9684xtpa highlighted the speed at which new liquidity returned:
> “Don’t underestimate the power of arbitrageurs! 😆 In just 30 minutes, USDT APY dropped back to 8.07%—incredible! HTX is still the top dog in Aave’s USDT vault, even after pulling $400M. They still have $1.2B left, making up 32.6% of total deposits.”
The sudden gap left by HTX's exit quickly attracted new whales, looking to capitalize on the temporarily high yields. Despite the disruption, Aave remains well-capitalized, with more than $1.2 billion in USDT still available across its pools and additional reserves in other stablecoins.
This withdrawal acted as a real-world stress test for Aave, impacting only one USDT pool and leaving the broader protocol largely unaffected. The AAVE token saw only a minor dip of 2.7%, settling at $262.90.
Anas noted that the fact $400M could be removed without causing systemic risk is a testament to Aave’s resilience and the built-in balance of its pool mechanics. Currently, Aave V3 manages over $24 billion in total value locked, with $16.6 billion borrowed. The protocol is also bolstered by over 238 million GHO stablecoins in circulation and operates across 23 blockchain networks, maintaining its position as the leading DeFi lending platform.