Aave's TVL Falls After Justin Sun Actively Withdraws Crypto

by in DeFi News

Justin Sun DeFi Aave

Total value locked in DeFi lending and borrowing platform Aave has decreased significantly.

Related: Staked ADA on Cardano Reaches New All-time High

Per data from DeFi tracking and analytics platform DeFi Pulse, Aave's TVL fell by around 12% from October 29, dropping to $11.95 billion from $17.8 billion.

With less liquidity, interest rates in the protocol increased. Blockchain researcher Igor Igamberdiev published a screenshot showing that the founder of a blockchain protocol, Tron, Justin Sun played a major role in the liquidity changes in Aave. As can be seen in EtherScan, Sun withdrew billions in cryptocurrencies.

After the hack of Cream Finance was announced on October 28, which resulted in the loss of $130 M, there was a proposal in Aave offering to update risk parameters. The proposal was admitted, however, people expressed concerns about the protocol's vulnerability. Among them is the founder of yield optimization platform Yearn Finance, Andre Cronje.

On October 29, the Aave team informed that the blockchain financial modeling platform Gauntlet Network proposed to disallow borrowing of xSUSHI and DeFi Pulse Index (DPI) tokens.