Crypto crash wreaking havoc on DeFi protocols, CEXs
2022.06.14 02:41
Crypto crash wreaking havoc on DeFi protocols, CEXs
On Monday, a heavy cryptocurrency sell-off in the markets caused significant ripples for projects and entities alike. On popular decentralized finance, or DeFi, lending protocol Aave (AAVE), utilization rates have fallen across nearly all stablecoin borrowings. Most notably, borrowings for Binance USD (BUSD) now stand at a mere 30% compared to a high of 80% back in May.
The utilization rate is the ratio of borrowed to deposited funds. Since borrowers are required to post digital asset collateral before taking out a loan on Aave, users are likely withdrawing en mass in light of Monda’s sell-off to prevent liquidation. Data from DeFi Llama indicates that Aave’s total value locked has fallen from $33.51 billion last October to $8.11 billion.
