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Analysis··10 min read

What Is Inside Aave V4's $125M on Avalanche

Aave V4 deposits on Avalanche topped $125M as a gross figure; transfers show a USDT lender and a leveraged USDe borrower behind most of the Nov. 1-3 jump. Borrower: the operator wallet of a vault we infer is Earn+.

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What Is Inside Aave V4's $125M on Avalanche - Market analysis

Aave V4 deposits on Avalanche passed $125 million on Nov. 2, according to Aave and Avalanche on X. Avalanche called it an all-time high and wrote that Ethena Pay's new Earn+ "is helping fuel the growth, bringing more deposits into v4."

As a gross deposits figure, that is accurate. DefiLlama's Aave V4 series puts gross supply on Avalanche at $120.29M at 00:00 UTC on Nov. 2 and $130.66M at 00:14 UTC on Nov. 3. What a gross figure counts is a separate question, and the on-chain record shows a concentrated answer. The Nov. 1-3 jump traces to a $48.05M USDT supply from one wallet and a second wallet adding $26.70M of net USDe collateral, funded by USDT borrows. Upshift's public vault record lists that second wallet as the operator of a vault we infer is Earn+. The vault took in only about $0.4M of new money on Nov. 1-3; most of its user money was in place before Nov. 1 and is part of the $57.17M base. Earn+ contributed through leverage on that money, not through the size of the deposits. The link to Earn+ is an inference, labelled as such below. Readings of Aave and Ethena Pay here are ours unless attributed.

What the number counts

DefiLlama lists Aave V4's Avalanche TVL and its borrowed balance as separate series. Adding them gives gross supply, since borrowed funds were supplied by someone. We did that sum, so the "gross" figures below are our arithmetic on DefiLlama data, read at about 01:16 UTC on Nov. 3. A dollar that is supplied, borrowed, swapped and supplied again shows up in supply each time.

Aave V4 came to Avalanche after a May 27 governance temp check, in which Aave Labs wrote that "Avalanche has committed up to $15M in incentives, tied to growth KPIs." Our earlier coverage of the design is in Aave V4's hub-and-spoke design on Avalanche.

DefiLlama's Avalanche series shows this path ($M, 00:00 UTC unless noted):

  • Sept. 23: gross 33.38, the day Avalanche posted that over 30M had been deposited on Aave v4 on Avalanche.
  • Oct. 27: gross 50.32.
  • Nov. 1: gross 57.17 (net of borrows 39.05, borrowed 18.13).
  • Nov. 2: gross 120.29 (net 85.47, borrowed 34.81).
  • Nov. 3, 00:14: gross 130.66 (net 85.41, borrowed 45.24).

From Nov. 1 to Nov. 3, gross supply rose $73.5M. In the same DefiLlama token breakdown, USDT supplied went from 7.60 to 55.60 (+48.0) and USDe from 5.64 to 34.13 (+28.5). Other assets fell by about $3.0M combined.

Two wallets and a counterparty

Transfer totals in this section and the next come from one pull of each address's full USDT and USDe history, through 01:22 UTC on Nov. 3. Snowscan's token-transfer records show wallet 0xb873…313c sending $48.05M of USDT to 0xd073…df6e, which Aave's published address list gives as the Core hub for Aave V4 on Avalanche (page read Nov. 3) in five transfers. The two largest landed on Nov. 1: $25M at 14:15 UTC (tx 0x0871…833a) and $23M at 14:17 UTC (tx 0x2d75…399e). That wallet received its USDT from 0xd7fc…56a0, which sent it $79.66M and took back $2.00M, per Snowscan.

Of that $79.66M, $22.03M came after the $48.05M supply: $9M on Nov. 1 at 19:08 UTC, $4.03M on Nov. 2 at 04:15 UTC and $9M on Nov. 2 at 22:16 UTC (Snowscan). Those are transfers to the wallet. Snowscan shows no transfer from 0xb873… to the hub after 14:17 UTC on Nov. 1, as of 01:22 UTC on Nov. 3, and the records do not show whether the later dollars are the same ones.

The same 0xd7fc… wallet received $55.00M of USDT from 0x5754…b949, which Snowscan labels "Tether: Treasury." The token-transfer records for 0xd7fc… also show $54.20M of USDe arriving from the zero address between Sept. 17 and 01:22 UTC on Nov. 3, $45.00M of it since Oct. 28. A transfer from the zero address is a mint of the token on Avalanche. That can reflect tokens bridged in from another chain, so by itself it does not show newly issued USDe.

The second wallet, 0xe08a…e506, is the borrower and, per the Upshift record described below, the vault operator's wallet. Snowscan shows it taking $31.49M of USDT out of the hub and returning $3.14M, a net $28.36M. Its records start on Oct. 6 with a 1 USDe transfer from another address, and its first transfer with the hub came on Oct. 27 at 13:38 UTC (1 USDe). It sent 0xd7fc… $31.49M of USDT and received $31.45M of USDe in return, close to one for one. On the USDe side it put $38.87M into the hub and withdrew $6.51M, net $32.36M of collateral, according to the same records. Net figures are summed before rounding. Of the USDe collateral, a net $26.70M went in on Nov. 1-3 ($26.72M in, $0.02M out), and $25.72M of the USDT came out of the hub in the same days with none returned.

Read together, our reading is a loop: USDT supplied by one wallet is borrowed by the vault operator's wallet, swapped into USDe, and posted as collateral to borrow more USDT. Supplying USDT to a lending market for others to borrow is ordinary DeFi activity. As of Nov. 3, no public source we read says who controls 0xb873… or 0xd7fc….

Where Earn+ appears

Ethena Pay's launch post, dated Oct. 28, says the Earn+ vault "supplies USDe as collateral to an Aave v4 Avalanche market, borrows USDT, acquires USDe" and "then repeats that process and targets a leverage ratio of ~11x." The vault is managed by Upshift and Steakhouse, and the overall limit was "initially set at $4.5m." Ethena Pay's FAQ lists the cap as "currently $4,500,000." Conor Ryder, whose X profile lists him as Head of Research at Ethena, wrote on Nov. 2: "USDe balances in Ethena Pay of $10.9m. Earn+ launch brought in $4m in a few days." Because the $4m follows the balance figure for Ethena Pay as a whole, it may describe inflows to Ethena Pay rather than deposits in the vault, and we do not use it as the vault's figure.

The vault's figure comes from Upshift. Its public API (read at 01:34 UTC on Nov. 3) lists a vault named "Ethena USD+ Avalanche" at 0x6aab…0f55, with Steakhouse Financial as strategist, a receipt token pUSDe and a reported TVL of $4.43M, updated at 00:16 UTC. The record carries is_visible: false and does not use the name Earn+. It lists 0xe08a…e506 as the vault's EOA operator, named "EPay subaccount - EVM," and a second subaccount, 0x9F75…f62b. That this vault is Earn+ is our inference. It rests on Steakhouse and Upshift being the managers Ethena Pay names, USDe as the asset, an Aave v4 Avalanche market, and the "EPay" name on the operator wallet.

Snowscan shows the vault contract 0x6aab… sending 0xe08a… $6.54M of USDe and receiving $2.24M back, a net $4.30M, about $0.13M under Upshift's TVL, a gap we have not reconciled. Snowscan shows 0x6aab… as a TransparentUpgradeableProxy contract with no public name tag. Of the net $4.30M, $3.92M had reached 0xe08a… by Oct. 31 and $0.39M arrived on Nov. 1-3. The vault's user money was therefore mostly in place before Nov. 1, and it is part of the $57.17M base. At the start of Nov. 1, 0xe08a… already held about $5.66M of net USDe collateral in the hub, about the same as DefiLlama's 5.64 for all USDe supplied that day.

What drove the Nov. 1-3 jump is the $48.05M USDT supply from 0xb873… (all but $0.05M of it on Nov. 1) and $26.70M of net USDe added by the vault operator's wallet, funded by USDT borrowed from the hub, on about $0.4M of new vault money (Snowscan, Snowscan). Earn+ is not absent from that: Ethena Pay describes a loop that borrows USDT and buys more USDe, and the loop is leverage on the vault's money. On the operator record's reading, Avalanche's line that Earn+ is "helping fuel the growth" holds. What it measures is leverage on roughly $4.4M of user money, not $26.70M of new deposits.

On Upshift's TVL, our arithmetic puts the leverage at about 7.3x: $32.36M of net USDe collateral at 0xe08a… (through 01:22 UTC) over $4.43M (00:16 UTC), against the stated ~11x target. The ratio is ours and mixes two sources read about an hour apart. The position may still be building, so the gap to ~11x is not a shortfall. As a rough second check, net USDe collateral less net USDT borrowed is $4.00M ($32.36M minus $28.36M), against the $4.43M TVL; the figures are measured differently (Snowscan, Ethena Pay).

The record's other subaccount, 0x9F75…f62b, shows no transfer with the Aave hub in its USDT and USDe histories (Snowscan, pulled through 01:35 UTC on Nov. 3). Those histories hold a 0.10 USDe-for-0.10 USDT exchange with 0xd7fc… on Sept. 23 and about $11,400 of USDe each way with 0x6aab… between Sept. 24 and Oct. 8, with nothing after Oct. 8. Beyond the transfers shown above, we found nothing linking 0xb873… or 0xd7fc… to the vault operator. A swap counterparty and a lender are ordinary roles.

What would change the reading

On those numbers, one lender wallet supplied $48.05M of the $55.60M of USDT supplied, and the borrower's USDe collateral is $32.36M of the $34.13M total. If 0xb873… withdrew, supply would fall by roughly that amount and the gross figure with it (DefiLlama, Snowscan). USDT borrowed was $32.75M against $55.60M supplied on Nov. 3, a 59% ratio (ours, from DefiLlama). Whether withdrawals are limited by that ratio depends on market mechanics we have not read in Aave's documentation, so we do not state them.

Ethena Pay's launch post calls Earn+ "a third-party product," says withdrawals are processed "within 24 hours," and says the oracle for USDe on Aave v4 is "pegged to USDT." Its FAQ says "You could lose some or all of the money you move into Earn+." and, beside its own "within 24 hours," that withdrawals "are processed, not instant, and can take longer than usual." Neither page discusses liquidation or utilization.

Open items

  • Who controls 0xb873… and 0xd7fc…, as of Nov. 3.
  • Whether the $4.5M Earn+ limit will rise, which Ethena's post says will happen "as caps are filled."
  • Whether the 22.03M of USDT that 0xd7fc… sent 0xb873… after Nov. 1 goes into the hub, and whether 0xb873… leaves its existing supply in place. No supply from 0xb873… had followed by 01:22 UTC on Nov. 3.

Sources

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