13% yield opportunity on stablecoins on-chain! On Aave, the deposit interest rate for USDT/USDC has now reached around 13.4%. The downside? 100% utilization rate—meaning liquidity is fully drained, and if you deposit now, you won’t be able to withdraw it. By now, you’ll realize that the original DeFi logic has effectively broken down: the design intended to raise borrowing rates as utilization increases, incentivize more deposits, and pressure borrowers to repay early—to restore balance. But Aave, in an effort to protect borrowers from liquidation, artificially capped interest rates at 15%. Few are willing to risk locking up their funds (or absorbing partial losses) just for this rate. Yesterday and today, most discussions centered on hacks and security issues... but today we see that Aave’s interest rate design is also flawed. Even if there’s no direct financial loss (which is unlikely—the borrower won’t repay), DeFi has already suffered major damage, because now people see that Aave isn’t as robust as it seemed. (For clarity: the conclusion is—do not deposit into Aave right now.)