Justin Sun withdraws $ 4.2 billion in cryptocurrency from Aave protocol

Justin Sun is careful

Justin Sun, founder of Tron, withdrew billions of dollars from the Aave decentralized lending protocol.

According to the data, the entrepreneur has withdrawn over $ 2.1 billion from Ethers (ETH), $ 1.1 billion from USD Coin (USDC), $ 681 million from Wrapped Bitcoin (WBTC) and 188 million dollars of Tether (USDT) for a total value of $ 4.2 billion.

The impact of this withdrawal was immediate and caused the Protocol Locked Value (TVL) to drop from $ 18.48 billion on October 28 to around $ 15 billion the next day.

With liquidity drying up so quickly, interest rates on Aave have skyrocketed, prompting many people to transfer liquidity to Aave.


Yield of stablecoins on Aave V2 – Saturday October 30

How to explain this withdrawal?

We don’t know Justin Sun’s exact motivations. However, this massive withdrawal could be the result of concerns raised by the heated discussions between Yearn Finance and Aave. During a Twitter chat, members of the Yearn Protocol team hinted that Aave was vulnerable to a possible attack.

Yearn founder Andre Cronje even spoke on the subject:

“Aave is vulnerable to the same flaw that caused the $ 130 million loss on the Cream Finance protocol last Wednesday. “

Banteg, the lead developer for Yearn, then clarified that he believed the vulnerability had very specific liquidity requirements, but was not currently viable.

Aave then acknowledged that there had been concerns about a vulnerability when xSUSHIs are used as collateral in the Aave protocol.

However, Aave claims to have run simulations which have shown that any assailant attempting this approach would end up losing money. Aave still submitted a proposal to disable the functions related to xSUSHI as a precaution.

👉 To read on the same subject: A hacker steals more than $ 130 million from the Cream Finance protocol

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About the author: Florent David


Engaged in the crypto ecosystem since 2017. I am particularly interested in decentralized finance (DeFi), Ethereum 2.0 and non-fungible tokens (NFTs).
All articles by Florent David.

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