Aave and Lido lose $1.7B in massive DeFi capital drop after the Binance hack
Stablecoin market capitalization fell by more than $10 billion in 30 days to $293.8 billion by Nov. 3, amid a Binance breach that affected about $6.34 billion in assets. An exploiter-linked wallet used 60 million USDT as collateral on Aave to borrow about $44.6 million in WETH; the position was assessed as overcollateralized and not a risk to suppliers. Aave temporarily froze reserves, restricting new deposits and borrowing. Withdrawals drove utilization in some large reserves to 92%-100%, raising borrowing costs. Affected reserves reopened by Oct. 31, with settings and rate curves restored by Nov. 1. Aave TVL fell about $1 billion over the period, though falling token prices can lower TVL without withdrawals. The key concern is tighter liquidity, which can increase slippage, borrowing costs and liquidation risks.
