Gate News message, April 20 — A weekend hack that drained nearly $300 million from a lesser-known crypto project has triggered a liquidity crisis on Aave, DeFi’s largest lending platform, with users withdrawing approximately $9 billion in response.
According to cybersecurity researcher PeckShield, hackers deposited roughly $200 million of the stolen tokens onto Aave as collateral to borrow other cryptocurrencies. This move sparked concerns among Aave depositors about the potential insolvency of collateral backing loans on the platform, prompting a rush for withdrawals.
Crypto portfolio manager Pratik Kala noted that the fear of worthless collateral triggered the mass exodus from the platform, reflecting broader contagion risks in DeFi lending protocols when collateral quality is questioned.
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