Aave news

Aave risk service provider LlamaRisk has proposed winding down V3 deployments on six blockchains: Sonic, Scroll, zkSync, Metis, Soneium, and Aptos. The July 29 forum proposal cites that each of these networks generates less than $5,000 in quarterly protocol revenue, with support costs exceeding earnings. The plan affects $12.8 million in supplied assets and $4.1 million in debt. The staged exit would freeze reserves, cut supply and borrow caps to 1, and apply a 99% reserve factor and 5% base variable rate to borrowed reserves. This is intended to encourage withdrawals and repayments while minimizing immediate liquidation risk. Later steps could include raising interest rates, reducing liquidation thresholds, and replacing oracles with fixed-price adapters. Positions remain open during the initial phase, with further unwind considered case by case.

Aave is winding down its operations on six blockchain networks and deprecating dozens of low-activity reserves, affecting about $98 million in supplied assets and $15.6 million in debt. The move, proposed by Aave founder Stani Kulechov and prepared with risk service provider LlamaRisk, aims to reduce the protocol's economic and technical risk. The affected markets include Sonic, Scroll, zkSync, Metis, Soneium, and Aptos, along with 50 individual reserves and 21 matured Pendle tokens. The closures target deployments that have seen significant declines in deposits and revenue, with some generating less than $5,000 per quarter. Users will have time to exit positions as the protocol gradually freezes reserves and adjusts parameters to encourage withdrawal and repayment.

Aave, the largest decentralized lending protocol, is considering a governance proposal to shut down operations on six low-usage blockchains: Sonic, Scroll, zkSync, Metis, Soneium, and Aptos. The move affects roughly $98 million in deposits, collectively less than 1% of Aave's $14 billion total assets, and each chain generates under $5,000 in quarterly revenue, far below maintenance costs. Deposits on some chains have fallen over 90% in six months. The proposal would freeze these markets to new activity and hike borrowing costs to encourage users to exit voluntarily. The timing is driven by declining revenue—gross revenue fell from $198 million in Q1 to $156 million in Q2, with liquidation fees dropping sharply. The cleanup aligns with Aave's earlier directive requiring future deployments to commit to at least $2 million in annual revenue, framing the exit as both cost-cutting and risk reduction.

Aave founder Stani Kulechov announced on July 30 that the lending protocol plans to wind down deployments on six blockchain networks and remove dozens of low-use asset reserves, affecting approximately $98.1 million in supplied assets and $15.6 million in debt. The proposal includes closing markets on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos, which collectively hold $12.8 million in supply and $4.1 million in debt, as these deployments have seen significant deposit declines and generate insufficient revenue. The plan also targets 50 low-adoption reserves and 21 matured Pendle principal tokens across 11 deployments, accounting for $85.3 million in supplied assets and $11.5 million in debt. Affected assets include bridged USDC variants and wrappers like FBTC and eBTC on Ethereum, which have seen low demand. Existing positions can remain open initially, but freezes, reduced caps, and higher reserve factors will encourage orderly exits, with potential rate increases and liquidation threshold adjustments if needed. The proposal is currently in the Aave Request for Comment stage and requires DAO approval through a Snapshot vote and an on-chain Aave Improvement Proposal before implementation. This move marks a strategic retreat from broad expansion, focusing resources on Aave V4, institutional markets, and higher-use deployments, while Aave remains the largest decentralized lending protocol with about $14.5 billion in total value locked.

Aave proposed deprecating 75 reserves and six deployments, affecting $98.1 million in supplied assets and $15.6 million in debt.

Aave has launched V4 on Avalanche, its first deployment of the new lending infrastructure outside Ethereum. The upgrade introduces a Hub & Spoke architecture, enabling specialized lending markets with independent risk parameters while sharing liquidity across the protocol. The expansion is designed to support tokenized real-world assets as collateral, with initial plans for borrowing against tokenized assets. Future markets on Avalanche could include tokenized US Treasurys, money market funds, private credit, and corporate bonds. The move coincides with growing institutional interest in tokenized collateral, as firms like Franklin Templeton, Nasdaq, and DTCC develop infrastructure for using tokenized assets in lending and trading. Tokenized real-world assets have surged to over $34 billion, up from $12.8 billion a year ago.

In Episode 17 of The Block's Layer One podcast, Aave Labs founder Stani Kulechov discussed Aave V4's first non-Ethereum deployment on Avalanche and the Horizon securities market for tokenized real-world assets (RWAs). He predicted RWAs will double to $100 billion by end of 2026. Kulechov also addressed the GHO stablecoin, the upcoming consumer Aave App, and why Avalanche was chosen for the V4 deployment. The podcast, hosted by Kelvin Sparks and John Wu, covered Aave's $3 trillion in deposits and its expansion into RWA infrastructure.

Galaxy Digital has launched the Galaxy Onchain Financing Rate (GOFR), a managed crypto lending product for institutions and accredited investors. It aggregates variable borrowing rates from DeFi protocols like Aave, Morpho, and Spark into a single optimized rate, with Galaxy handling all wallet and smart contract operations. Borrowers can post native bitcoin as collateral, and Galaxy provides up to $100 million in first-loss protection. The minimum loan size is $1 million. Galaxy will publicly publish the GOFR rate to serve as a reference for onchain financing. The product differentiates from similar offerings, like Coinbase's lending service, by combining multiple DeFi rates with managed services.

Aave Labs launched Stable Vaults, allowing fintech firms to offer stablecoin yields via a single integration without exposing users to DeFi complexity. The vaults automatically allocate deposits across approved lending strategies, managing liquidity and yield distribution. This move positions Aave against rivals like Morpho, which already powers high-yield stablecoin products at Coinbase and Robinhood. The vaults support USDC, USDT, and Aave's GHO, and will underpin Aave's upcoming savings app.

Aave Labs has launched Stable Vaults, a new infrastructure product designed to let fintechs, wallets, and other businesses offer predictable stablecoin yield to users without managing complex DeFi systems. The vaults deploy deposits across strategies like Aave V3/V4 markets and Savings GHO, smoothing variable returns into a more stable earnings experience. Institutional users can customize deposit stablecoins, set access controls, and configure custom rates. Withdrawals occur in two on-chain steps to enable cross-chain liquidity rebalancing. Aave Labs continues expanding consumer and institutional products following a governance dispute that saw key contributors leave the protocol.