Aave Founder Says Asset Wind-Downs Driven By Risk Reduction, Not Layer 1 Or Layer 2 Strategy Shift

by
Alisa Davidson

Printed: July 30, 2026 at 10:30 am Up to date: July 30, 2026 at 10:18 am

by Anastasiia O

Edited and fact-checked:
July 30, 2026 at 10:30 am

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Aave founder Stani Kulechov has clarified that the protocol’s current resolution to decommission dozens of low-adoption property and 6 blockchain deployments is strictly a risk-management train and shouldn’t be interpreted as an announcement on the viability of any Layer 1 or Layer 2 community. 

In a put up on social media platform X, he defined that the purpose is to shrink Aave’s operational, technical, and financial danger floor so the decentralised lending protocol can think about higher-impact priorities, together with rising present high-value markets and increasing into securities finance.

The proposal, ready by danger service supplier LlamaRisk, recommends offboarding 50 low-adoption reserves and 21 matured Pendle Principal Tokens throughout 11 Aave V3 deployments. It additionally requires the complete wind-down of six smaller deployments—Sonic, Scroll, zkSync, Metis, Soneium, and Aptos—which collectively cowl an extra 25 reserves. In whole, the initiative would have an effect on roughly $98.1 million in provided property and $15.6 million in excellent debt. 

Stani Kulechov emphasised that Layer 2 networks stay important to Ethereum’s consumer expertise, citing Aave App’s Steady Vaults, which use a Layer 2 as an accounting layer to onboard mainstream customers into decentralised finance. He additionally famous that networks corresponding to Avalanche play an necessary function in bringing RWAs on-chain via institutional channels.

Governance Overhaul Follows KelpDAO Exploit

The reserve evaluation is the primary main train underneath Aave’s newly proposed Threat Framework, which was launched in June following the roughly $292 million KelpDAO bridge exploit. That incident uncovered the protocol to potential unhealthy debt after stolen rsETH was deposited as collateral, prompting a shift from reactive danger administration to a standardised, portfolio-wide method. Beneath the brand new framework, property and deployments that not justify the overhead of sustaining worth oracles, liquidation infrastructure, and steady monitoring are flagged for removing.

For affected reserves, Aave plans to freeze new deposits and borrows, scale back provide and borrow caps to at least one unit, and lift reserve components on borrowable property. Deployments slated for full retirement would see reserve components elevated to 99% and base rates of interest hiked to encourage customers to unwind positions. A companion proposal from LlamaRisk additionally targets long-tail reserves with elevated Chainlink price-feed danger, proposing to exchange reside feeds with fixed-price adapters. 

Alisa, a devoted journalist on the MPost, focuses on crypto, AI, investments, and the expansive realm of Web3. With a eager eye for rising tendencies and applied sciences, she delivers complete protection to tell and have interaction readers within the ever-evolving panorama of digital finance.

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