Aave has seen a sharp increase in borrowing rates for Tether, rising from around 3% to 14%, marking the highest level since December 2024, according to CryptoQuant data.
The surge reflects tightening liquidity conditions within DeFi markets, where rising demand for borrowing combined with limited supply is pushing funding costs significantly higher.
Data also shows increased borrowing activity alongside the rate spike, indicating heightened trader participation, potentially driven by leverage usage or position management.
Analysts suggest this dynamic may signal short-term market stress, as spikes in borrowing rates are often associated with increased volatility or major price movements.