LlamaRisk proposes narrowing the scope of collateral assets for Aave V3 Core, involving $1.33 billion in collateral assets.

November 11: Aave risk service provider LlamaRisk has posted a proposal on the governance forum, suggesting that Aave V3 Core focus on mature and highly liquid collateral, with Aave V4 supporting a broader range of assets through risk premiums and isolation mechanisms. The proposal plans to freeze the reserve pools for assets such as rsETH, osETH, LBTC, tBTC, and rETH on V3 Core. As of November 9, the collateral involved in the proposal is valued at approximately $1.33 billion, corresponding to about $1.03 billion in debt.

According to the proposal, after the freeze, new deposits of the relevant assets will be suspended, and their loan-to-value (LTV) ratios will be reduced to zero, meaning users will no longer be able to initiate new borrowings using these assets as collateral. Existing positions can continue to be held, repaid, or migrated. LlamaRisk plans to coordinate with asset issuers and major borrowers to migrate positions to the collateral retained on V3 Core or to Aave V4. If the relevant exposures fail to decrease, subsequent gradual reductions of liquidation thresholds may be considered based on asset conditions, or in the final stage, an increase in borrowing rates may be considered.