Marc Zeller, founder of Aave Chan Initiative, said in a post on X that Aave is "fine" after the Binance hacker opened a large position on the protocol.
According to Zeller, the hacker injected 60 million USDT into Aave within three minutes and borrowed 19,762 wETH, worth about $44.9 million at the time. He said Tether had not yet frozen the address, and Aave’s Guardian had not yet frozen reserves in the Aave V3 Core pool. That reserve freeze happened 46 minutes later.
The position remained overcollateralized
Zeller said that from the protocol’s point of view, the position was still overcollateralized even if the collateral came from criminal proceeds, because USDT is backed by U.S. dollars. He put the health factor at 1.04, with about $59.9 million in collateral against roughly $44.9 million in debt.
He also said Aave is now dealing with a large borrower that has little incentive to repay, but that does not stop the liquidation engine from working as designed. In his description, if ETH rises above about $2,365, or around 4%, the position would be liquidated like any other position on the protocol.
wETH reserves and withdrawal liquidity
Zeller said the Aave V3 Core pool currently holds 2.16 million wETH in total reserves, and the hacker’s debt represents only 0.9% of that amount. On that basis, he said Aave does not need to take special action aimed specifically at the hacker.
He added that 345,000 wETH is currently available, with utilization at 81.6%. That, he said, leaves enough liquidity for wETH depositors who want to withdraw, and there is no reason or need for a bank-run-style rush.
Governance action seen as unnecessary
Zeller compared the situation with the Kelp hack and said this case is far less severe because the earlier incident involved collateral with zero value.
He said a governance proposal could theoretically force liquidation by upgrading the pool. But if Aave were to lower USDT’s liquidation threshold, that would affect all USDT depositors. In his view, there is no practical benefit in taking that route because the normal liquidation process can absorb the debt easily.
