- Aave proposed removing low-adoption reserves and retiring six blockchain deployments under a protocol-wide risk management overhaul affecting $113.7 million.
- LlamaRisk reviewed inactive reserves, bridged assets, and matured Pendle tokens to reduce maintenance costs and operational complexity.
- Governance changes would freeze affected reserves, tighten borrowing parameters, and expand portfolio-wide risk standards across future asset listings and reviews.
Aave has proposed removing dozens of low-adoption asset reserves and retiring six blockchain deployments under a governance plan designed to strengthen risk management across the protocol. According to Aave founder Stani Kulechov, the proposal represents the first broad application of Aave’s new risk framework and could affect approximately $113.7 million in supplied assets and outstanding debt across multiple deployments.
LlamaRisk prepared the proposal after reviewing Aave’s ecosystem under the protocol’s proposed portfolio-wide risk standards. Instead of evaluating a single reserve, the assessment measured whether each listed asset and deployment still met the operational, liquidity, and maintenance requirements established under the updated framework.
According to the proposal, Aave plans to offboard 50 low-adoption reserves together with 21 matured Pendle Principal Tokens across 11 Aave V3 deployments. Additionally, the protocol intends to wind down its deployments on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos, bringing another 25 reserves under the proposed deprecation process.
The reserve removals account for approximately $85.3 million in supplied assets and $11.5 million in outstanding debt. Meanwhile, the six blockchain deployments represent another $12.8 million in supplied assets and $4.1 million in debt, highlighting the scale of the governance proposal despite targeting relatively smaller markets.
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Aave targets inactive assets and costly deployments
According to LlamaRisk, the proposal also covers bridged assets that duplicate native token listings alongside matured Pendle Principal Tokens that no longer generate yield. Moreover, several smaller deployments were selected because their protocol revenue no longer offsets the costs of maintaining price oracles, liquidation infrastructure, and continuous risk monitoring.
If governance approves the proposal, Aave will freeze new supply and borrowing activity across the affected reserves while reducing both supply caps and borrow caps to one unit. Besides that, the protocol will increase reserve factors on borrowable assets, making it less attractive for users to maintain positions within markets scheduled for removal.
Entire deployments marked for retirement will receive even stricter parameters intended to accelerate the wind-down process. Consequently, reserve factors will rise to 99%, while higher base interest rates will encourage users to unwind positions and migrate their assets to more active Aave deployments.
New framework expands protocol-wide oversight
The governance proposal follows the introduction of Aave’s proposed Risk Framework in June, which established common standards for asset listings, ongoing reviews, and future reserve removals across Aave V3, Aave V4, and Aave Horizon. According to Kulechov, the framework creates a consistent process for evaluating whether assets should remain listed as market conditions and protocol activity evolve.
The framework emerged after the approximately $292 million KelpDAO bridge exploit exposed Aave to potential bad debt through stolen rsETH deposited as collateral. As a result, the protocol expanded its assessment process beyond isolated assets and introduced portfolio-wide reviews designed to identify operational risks before they become larger governance concerns.
Additionally, LlamaRisk submitted a companion governance proposal targeting another group of long-tail reserves exposed to elevated Chainlink price feed risk. The proposal recommends replacing live oracle feeds with fixed-price adapters, reducing oracle-related exposure while improving consistency across Aave’s broader risk management framework.
Conclusion
The proposal reflects Aave’s effort to streamline inactive markets while applying uniform standards across its lending ecosystem. If approved, the governance changes will reduce operational overhead, remove underutilized reserves, and establish a structured process for evaluating future asset listings and protocol deprecations.
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