Analysis: Massive ETH Unstaking Queue May Be Linked to Sharp Drop in Ethereum Supply on Aave

According to a report by Jinse Finance, on-chain analyst Ai Yi has analyzed that the mass un-staking event involving 620,000 ETH may be related to a significant withdrawal of ETH deposits from a certain exchange platform, which in turn caused a spike in borrowing rates. The rapid and large-scale withdrawal of ETH deposits from the exchange led to soaring borrowing rates, forcing leveraged players who previously profited from interest rate spreads into losses. As a result, they were compelled to redeem stETH to deleverage, leading to the current situation. At one point, the ETH borrowing APR on the exchange surged to 10%. The Lido stETH exit waiting period has now been extended to 21 days (normally within a week), and there is still a discount of nearly 0.4% when swapping stETH for ETH on-chain. Regarding the implementation of leveraged lending, the exchange offers a collateral ratio of 93% for ETH, meaning arbitrage players can use leverage of up to 14 times to earn interest rate spreads. Under normal circumstances, the annualized return on principal can reach approximately 7%.