LlamaRisk proposes narrowing the Aave V3 Core collateral scope, involving approximately 1330000000 USD in assets
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AT A GLANCE
LlamaRisk proposed restricting new deposits and borrows for certain collateral assets in Aave V3 Core, involving approximately 1330000000 USD in collateral.
Article
LlamaRisk Proposes Narrowing the Collateral Asset Scope of Aave V3Core, Involving 1330000000 USD in Collateral Assets
BlockBeats News, November 11, Aave risk service provider LlamaRisk published a proposal on the governance forum, suggesting that Aave V3 Core focus on mature and highly liquid collateral, while Aave V4 supports a broader range of assets through risk premiums and isolation mechanisms. The proposal intends to freeze the reserve pools for assets such as rsETH, osETH, LBTC, tBTC, and rETH on V3 Core. As of November 9, the collateral involved in the proposal is valued at approximately 1330000000 USD, corresponding to approximately 1030000000 USD in debt.
According to the proposal, after the freeze, new deposits of the relevant assets will be suspended, and their loan-to-value ratio (LTV) will be reduced to zero, meaning users will no longer be able to initiate new borrows using these assets as collateral. Existing positions can continue to be held, repaid, or migrated. LlamaRisk plans to coordinate with asset issuers and major borrowers to migrate positions to collateral retained on V3 Core or to Aave V4. If the relevant exposure fails to decrease, the liquidation threshold may be gradually lowered depending on asset conditions, or borrowing interest rates may be raised as a last resort.
Original link https://m.theblockbeats.info/flash/376691
Key points
01
According to BlockBeats, on November 11, Aave risk service provider LlamaRisk published a proposal on the governance forum, suggesting that V3 Core focus on mature and highly liquid collateral, while Aave V4 supports a broader range of assets through risk premiums and isolation mechanisms.
02
The proposal intends to freeze asset reserve pools such as rsETH, osETH, LBTC, tBTC, and rETH on V3 Core.
03
As of November 9, the collateral involved in the proposal was valued at approximately 1330000000 USD, corresponding to approximately 1030000000 USD in debt.
04
According to the proposal, after the freeze, new deposits of the relevant assets will be suspended, and the loan-to-value ratio (LTV) will be reduced to zero, preventing users from initiating new loans using these assets as collateral; existing positions can continue to be held, repaid, or migrated.
05
LlamaRisk plans to coordinate with asset issuers and major borrowers to migrate positions to collateral retained in V3 Core or to Aave V4.
06
If the relevant exposure fails to decrease, the liquidation threshold may be gradually lowered in subsequent stages depending on asset conditions, or an increase in the borrowing interest rate may be considered at the final stage.
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
This is a proposal, not an adjustment already confirmed and implemented in the original text. Under the proposed arrangement, the relevant assets will no longer be able to receive new deposits, nor can they be used to initiate new borrowing, but existing positions may still be held, repaid, or migrated. Whether the liquidation threshold or borrowing interest rate will be further adjusted later depends on whether the relevant exposure declines.
Why it matters to readers
The proposal involves approximately 1330000000 USD in collateral and approximately 1030000000 USD in debt, with the focus being on the usage restrictions of the relevant assets in V3 Core and the migration arrangements for existing positions.
If you use the assets listed in the text to borrow against collateral in V3 Core, you should distinguish between "restricting new operations" and "handling existing positions": the original text does not require existing positions to exit immediately, but it sets out conditions under which the liquidation threshold or interest rate may be adjusted later.
Risks and unknowns
The original text does not confirm that the proposal has been approved or implemented, nor does it provide a final implementation timeline.
The original text only lists some of the assets involved and does not provide a complete list or the specific adjustment parameters for each asset.
Whether the position migration can be completed, whether the related exposures can be reduced, and whether the liquidation threshold or borrowing rate will be further adjusted, have not yet been determined.
Related Developments
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Related concepts
Loan-to-Value Ratio (LTV)
This term is not in the glossary yet. Browse related concepts in the glossary.
