Aave's largest stablecoin lending pools reached near-full utilization on 21 Apr, tying up nearly all remaining liquidity after users pulled billions of dollars from the protocol following a major exploit tied to the Kelp restaking platform.
Aave Pools Fully Utilized After Hack Outflows, Slowing Activity
21 April 2026 - 23:01 CEST
By Ana Pereira
Data from Aave's public dashboard at 19:09UTC showed the Ethereum V3 USDC market at 100.0% utilization and the USDT market at 99.9%, with borrowing costs around 14% as demand for remaining liquidity surged.
The move sparked concern among crypto traders. One analyst said on X that 100% utilization rate is "the worst state a lending protocol can be in," adding that "when liquidations cannot execute, the protocol has no way to protect itself against further bad debt."
Aave did not immediately respond to Sandmark's request for comment.
What full utilization means
Utilization measures how much of a lending pool's supplied assets has already been borrowed.
When a market reaches 100%, nearly all available liquidity has been lent out, leaving little idle capital for immediate withdrawals or fresh borrowing. Users can still exit as loans are repaid, new deposits arrive or collateral is liquidated, but access to funds can become slower during periods of stress.
For Aave, one of DeFi's largest sources of onchain dollar liquidity, pressure in its stablecoins pools can ripple across leveraged traders, yield strategies and protocols that rely on borrowing stablecoins.
Kelp exploit drove outflows
The liquidity squeeze followed nearly $6bn of weekend outflows from Aave's markets after hackers stole about $292mn from Kelp DAO, one of the largest DeFi exploits of 2026 so far.
Attackers drained around 116,500 rsETH tokens through a LayerZero-powered bridge, then used the assets as collateral on Aave to borrow wrapped Ether (ETH), creating estimated bad debt of $177mn to $196mn.
According to data from DefiLlama, Aave's total value locked fell from roughly $26bn on 18 Apr to about $16bn on 21 Apr as users withdrew funds amid contagion fears.
