USDT Borrowing and Deposit Rates Surge on Aave Platform

On April 19, data from the Aave platform indicated a significant increase in the annual percentage yield (APY) for USDT borrowing, reaching 14.99%, while the deposit APY surged to 13.39%. According to BlockBeats, this spike in rates is linked to a security incident involving KelpDAO. The hacker used Aave to collateralize illegally minted rsETH and borrowed a substantial amount of ETH. In response to this breach, over $54 billion in assets were urgently withdrawn from Aave as a precautionary measure. This mass withdrawal of funds is believed to have contributed to the sharp rise in USDT borrowing and deposit rates on the platform.