Behind AAVE’s 15% plunge: it’s not that it’s falling—trust has been punched through.


A typical “on-chain domino effect” has just occurred: hackers used rsETH to anomalously mint and borrow a large amount of ETH against Aave collateral.
It’s not that simple—this is: market trust is instantly pulled out and shattered in an instant.
First wave of impact: protocol risk is exposed.
When illicit assets can be used as collateral and leverage can be amplified: fundamentally, it means the collateral system has been bypassed → risk is amplified → credit is diluted.
Second wave of impact: massive whales flee together.
On-chain, “synchronized sell pressure” appears directly:
Polymarket user smaugvision sells 20,015 AAVE (about $2.06 million) @102.9 address 0xFC5
sells 20,000 AAVE (about $2.05 million) @102.8 address 0xA2E
sells 19,665 AAVE (about $1.95 million) @99.2
AAVE-19.47%
ETH-3.44%
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