Aave Risk Management Firm Proposes Phased Exit of $1.33 Billion in Collateral

TechFlow reported on Nov. 11, citing The Defiant, that Aave risk management firm LlamaRisk proposed a phased exit of certain collateral on Aave V3 Core. As of Nov. 9, the related assets had approximately $1.33 billion in collateral value, backing about $1.03 billion in debt.

The proposal covers assets such as rsETH, osETH, LBTC, tBTC and rETH. The initial measures propose freezing related reserves and setting loan-to-value ratios to zero, halting new supply and borrowing against the related assets as collateral, but will not immediately liquidate existing loans; borrowers may still repay, withdraw, or migrate to V4.

The plan remains in the discussion stage, and the initial measures must be approved and submitted as an on-chain governance proposal. If migration stalls, subsequent steps may gradually lower the liquidation thresholds for some assets.

Source: TechFlow