Aave is slashing away 50 sleepy asset reserves from its lending playgrounds while quietly shutting down ops on 6 whole blockchains.
Aave Begins Offboarding Quiet Reserves 🦇
In a July 30 post on X founder Stani Kulechov noted that the move touches $98.1 million in supply and $15.6 million in debt and comes wrapped in two new internal rulebooks meant to keep the protocol from carrying assets nobody is really using. “Aave is deprecating 50 low adoption asset reserves across multiple deployments” Kulechov wrote also citing an orderly wind-down of Aave deployments on Sonic Scroll zkSync Metis Soneium and Aptos affecting another 25 asset reserves. He added that 21 matured Pendle PT tokens would also be retired in favor of new maturities as part of the overhaul.
Risk management firm LlamaRisk and Aave service providers recommended removing several inactive Aave V3 reserves together with six complete market deployments. Those positions account for $85.3 million in supplied assets and $11.5 million in debt. The six blockchain deployments scheduled for retirement hold $12.8 million in supply and $4.1 million in debt. On Ethereum the biggest chunk of the list is two Bitcoin liquid-staking wrappers FBTC and eBTC whose combined deposits have fallen from roughly $72 million six months ago to about $16 million now. Several bridge tokens including USDC.e and USDbC are being cut because users have already migrated to native versions and MaticX is being wound down simply because its issuer Stader is retiring the token. On the six departing chains LlamaRisk said each deployment now brings in under $5,000 a quarter in revenue not enough to cover the oracle and monitoring costs of keeping it running. Deposits on those chains had already thinned out well before the vote with Sonic falling from $28.9 million to $7.6 million and Scroll from $16.1 million to $2.2 million over the past six months. The stated objective is to remove protocol exposure gradually allowing users to exit positions in an orderly manner while limiting liquidation risks. Under the default wind-down process each reserve will be frozen and its supply and borrowing caps reduced to one.
Oracle Tweaks Stretch Across V2 And V3 Markets 🌙
The proposal will cover oracle infrastructure in which LlamaRisk’s recommendation has identified a group of Chainlink price feeds linked to long-tail assets in Aave V2 and V3 for deprecation. Chainlink placed the links in a high or very high operational risk category because the underlying assets have lost significant adoption and liquidity leaving insufficient trading activity for reliable pricing. Those oracle changes will affect 10 deployments and assets worth a combined $6.76 million in supplied funds and $4.29 million in debt. The reserve cuts land a few months after Aave moved on two separate fronts. In late May two of its UK subsidiaries won registration from the Financial Conduct Authority to run crypto exchange and electronic money services. Then in June Grayscale Research put out a report estimating AAVE’s fair value near $175 within a year well above where the token is currently trading citing the protocol’s lending market share its roughly 200,000 monthly users and its push into tokenized real-world assets through its institutional market called Horizon. 🖤🕸️💀🌹🦇🔮🕷️
Just another echo from the void by iconofsin.eth 💖
