Aave's USDT0 Lending Pool Offers High Yield with Limited Withdrawal Capacity

Aave's USDT0 stablecoin lending pool on the Monad network offered a 6.10% annual percentage rate over the weekend, but only $4.4 million of its $55.9 million supplied balance was available for withdrawals.

This is because when suppliers remove tokens while loans remain outstanding, a greater share of the remaining pool is borrowed, and Aave's interest-rate curve raises returns for lenders who stay.

The withdrawal rules limit suppliers to underlying tokens that are available and have not been borrowed. This means that cash access refers to receiving stablecoin tokens rather than redeeming them for fiat currency.

A depositor using the position as collateral may face another constraint: withdrawing must leave enough collateral to support the depositor's own loans.