Tron CEO Justin Sun Withdraws $4.2 Billion from Aave, Colin Wu Explains Why
Aave Finance (AAVE), one of the largest DeFi protocols, witnesses the most impressive capital flight in its history
Journalist and insider Colin Wu, an expert in the Chinese cryptocurrencies market, explains why Tron founder and BitTorrent CEO Justin Sun decided to move billions of dollars from Aave’s liquidity mechanisms.
Justin Sun withdrew $4.2 billion from Aave: Details
As per the statement by Mr. Wu, Mr. Sun removed a 10-digit sum in various digital assets from Aave’s lending pools. Namely, the Tron founder withdrew $2.1 billion in Ethers (ETH), $1.2 billion in USD Coins (USDC), as well as his WBTC, USDT and TUSD bags.
Justin Sun transferred 4.2 billion US dollars from Aave, which may be related to this proposal by the community. pic.twitter.com/4YnbG7iNRL
— Wu Blockchain (@WuBlockchain) October 30, 2021
According to the journalist, this eye-watering withdrawal may be the result of concerns about the potential vulnerability of Aave Finance’s design.
Allegedly, this vulnerability is similar to the design flaw of Cream Finance (CREAM) that resulted in a $130 million hack that took place three days ago.
Renowned DeFi developer, Yearn.Finance’s core maintainer, Banteg, stressed that Aave’s vulnerability is the same, so it should be made public.
Aave Finance TVL down 28.3% overnight
To protect the stability of the protocol, the Aave Finance community published a proposal to disable borrowing options for XSUSHI and DPI tokens, as well as for UNI/BAL liquidity pools.
This proposal passed and will be implemented on Nov. 1, 2021.
According to third-party analytical dashboards, the total value locked (TVL) metrics of Aave Finance (AAVE) lost 28.3% in the last 24 hours.
Aave remains the third-largest DeFi by TVL, surpassed by Maker and Curve Finance only.
