LlamaRisk Proposes Narrowing Aave V3 Core to Blue-Chip Collateral, Affecting About $1.33B in Collateral

November 11: Per the Aave governance forum, risk service provider LlamaRisk has filed an ARFC proposal that Aave V3 Core should in future serve only highly liquid blue-chip collateral assets, with other asset types moving to Aave V4. The proposal covers rsETH, osETH, LBTC, tBTC, rETH and a group of smaller-exposure assets. As of November 9, these assets held about $1.33 billion in collateral against about $1.03 billion in borrows. The first step is to freeze these asset markets, halt new deposits and set LTV to 0, with existing positions unaffected; for already-frozen, borrowable assets where borrows still exceed $20,000, the reserve factor would be raised to 99%. LlamaRisk would then coordinate an orderly migration with issuers and large borrowers; if migration is not completed within a few months, liquidation thresholds would be lowered step by step and interest rates adjusted.