Aave freezes tBTC reserves in Ethereum Core Market, suspends new deposits and collateralized borrowing

On October 31, following a governance forum announcement from Aave risk service provider LlamaRisk, Aave has preemptively frozen tBTC reserves in the V3 Ethereum Core market after Threshold Network suspended tBTC minting and redemptions, halting new tBTC deposits and new borrows collateralized by tBTC.

Users can still repay and withdraw assets, liquidations continue to run, and the health factors of existing positions will not be affected by the freeze. This freeze only applies to tBTC reserves in the Ethereum Core market; other reserves remain unaffected, and the market itself has not been paused.

LlamaRisk stated that it will continue to monitor Threshold's updates, as well as tBTC positions and secondary market liquidity, and will propose recovery measures once tBTC operations resume normally.