Aave's Exit Triggers Chain Reaction as Credit Infrastructure Collapses

Aave has announced it will close lending markets on six blockchains, citing low revenue and lack of demand. The move is expected to have a ripple effect across the industry, potentially leading to the collapse of credit infrastructure on these chains.

The affected chains are Soneium, Aptos, Zksync, Scroll, Mentis, and Harmony Protocol. These chains generated less than $5,000 in revenue per quarter, making it unprofitable for Aave to continue lending on them.

Aave's withdrawal will trigger a chain reaction, with other service providers re-evaluating their support for these chains. Market makers and stablecoin issuers may also stop investing funds in DEXs on these public chains.

The collapse of credit infrastructure on these chains could lead to a loss of lending demand, making it difficult for developers to build financial applications on top of them.