After this week’s events, it’s safe to say that DeFi will never be the same. Yes, more than 132 billion dollars are managed by different protocols, and Aave is the biggest of them all. For years, the team has built a reputation as conservative and the results are evident for all to see.
Aave manages over $32.2 billion in assets across 18 chains as of publication. However, much of this is in Ethereum. The fact that Aave controls more assets than Lido, a liquidity staking platform primarily helping to secure Ethereum, is a huge vote of confidence for decentralized money markets.
(Source: DéfiLlama)
The rapid expansion of AAVE crypto prices in 2025 reflects this impressive growth. Perched among the 50 most valuable coins, AAVE crypto is more valuable than BGB, the token behind Bitget. What more? AAVE is worth more than PYUSD, the stablecoin associated with PayPal, the payment processor.
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Even with the billions under management in Aave and the protocol’s resilience in the face of the “destructive” volatility of this week, and especially October 10, questions arise about the preferential treatment it enjoys with USDe and sUSDe.
You see, earlier this year there was a proposal (which was approved) to “hardcode” the floating price of sUSDe and USDe, the algorithmic stablecoins issued by Ethena Labs, with USDT.
Despite the lack of an official audit of Tether’s reserves, USDT has maintained its foothold in recent times.
Unfortunately for cryptocurrencies, if USDT falls, billions will likely be liquidated, primarily on decentralized currency markets like Aave.
Therefore, it made sense for USDe and sUSDe to be directly linked to USDT via manual adjustment. Ideally, this should not be the case, especially if decentralized oracles are allowed to operate as intended.
Yet this hardcoding helped save thousands of USDe holders on Aave when crypto prices collapsed on October 10. While perpetual exchanges raked in billions in profits from liquidations, something else happened.
USDe deindexed on Binance, falling as low as $0.65 due to buyback pressure, including the failure of delta neutral strategies. Interestingly, on several other platforms, including Curve, Coinbase, and Uniswap, USDe has remained relatively stable, around the ideal $1 mark.
(Source: Hosseeb, X)
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Although hardcoding USDe with USDT helped avoid the liquidation of hundreds of millions of collateral, risks remain.
