Aave’s core markets have reached 100% utilization, leaving roughly $5B in USDT and USDC locked, following the rsETH exploit that triggered a sharp liquidity outflow.

1️⃣ What’s happening now:

– Withdrawals are effectively blocked, all liquidity is borrowed

– Any new liquidity gets instantly absorbed by bots

– Users can see funds, but can’t exit positions

2️⃣ What caused the lock:

Large holders moved first, withdrawing $5B–$6B+ within hours and draining pools.

As a result:

– ETH, USDT, USDC markets are fully utilized

– Late users are left without accessible liquidity

– Aave is now dealing with ~$200M in bad debt

3️⃣ User Response:

With no withdrawals available, users are forced into workarounds:

– Borrowing against their own deposits

– Using GHO, DAI, USDe to exit

– Accepting 10–25% losses

– Driving $300M+ in forced borrowing

Meanwhile, bots continue to front-run every small liquidity window.