Aave Founder Says Asset Wind-Downs Driven By Risk Reduction, Not Layer 1 Or Layer 2 Strategy Shift
Aave founder Stani Kulechov has clarified that the protocol’s latest choice to decommission dozens of low-adoption property and 6 blockchain deployments is strictly a risk-management train and shouldn’t be interpreted as a press release on the viability of any Layer 1 or Layer 2 community.
In a submit on social media platform X, he defined that the objective is to shrink Aave’s operational, technical, and financial threat floor so the decentralised lending protocol can consider higher-impact priorities, together with rising present high-value markets and increasing into securities finance.
The proposal, ready by threat service supplier LlamaRisk, recommends offboarding 50 low-adoption reserves and 21 matured Pendle Principal Tokens throughout 11 Aave V3 deployments. It additionally requires the total wind-down of six smaller deployments—Sonic, Scroll, zkSync, Metis, Soneium, and Aptos—which collectively cowl an extra 25 reserves. In complete, the initiative would have an effect on roughly $98.1 million in equipped property and $15.6 million in excellent debt.
Stani Kulechov emphasised that Layer 2 networks stay crucial to Ethereum’s person expertise, citing Aave App’s Stable Vaults, which use a Layer 2 as an accounting layer to onboard mainstream customers into decentralised finance. He additionally famous that networks akin to Avalanche play an essential function in bringing RWAs on-chain by means of institutional channels.
Governance Overhaul Follows KelpDAO Exploit
The reserve assessment is the primary main train underneath Aave’s newly proposed Risk Framework, which was launched in June following the roughly $292 million KelpDAO bridge exploit. That incident uncovered the protocol to potential dangerous debt after stolen rsETH was deposited as collateral, prompting a shift from reactive threat administration to a standardised, portfolio-wide method. Under the brand new framework, property and deployments that now not justify the overhead of sustaining value oracles, liquidation infrastructure, and steady monitoring are flagged for elimination.
For affected reserves, Aave plans to freeze new deposits and borrows, scale back provide and borrow caps to at least one unit, and lift reserve components on borrowable property. Deployments slated for full retirement would see reserve components elevated to 99% and base rates of interest hiked to encourage customers to unwind positions. A companion proposal from LlamaRisk additionally targets long-tail reserves with elevated Chainlink price-feed threat, proposing to exchange reside feeds with fixed-price adapters.
The submit (*2*) appeared first on Metaverse Post.
