Aave to Exit Six Blockchain Markets and Deprecate 50 Low-Activity Reserves Affecting $98 Million

Aave, one of DeFi's largest lending protocols by total value locked, is set to deprecate dozens of low-activity asset reserves and shut down six blockchain deployments as part of a broad initiative to reduce its economic and technical risk exposure.

Aave founder Stani Kulechov announced that the protocol will deprecate 50 low-adoption reserves across multiple deployments. Additionally, it will conduct an orderly wind-down of its markets on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos, affecting another 25 reserves.

The overhaul also covers 21 matured Pendle Principal Tokens, which will be replaced by reserves tied to newer maturities.

In total, the changes impact approximately $98.1 million in supplied assets and $15.6 million in outstanding debt.

"These measures reduce Aave's economic and technical risk surface as part of the new Aave Risk Framework and Technical Asset Listing Framework," Kulechov said.

The recommendations were developed by DeFi risk service provider LlamaRisk in collaboration with other Aave service providers focused on reducing the protocol's risk surface. According to the review, individual reserve removals account for $85.3 million in supply and $11.5 million in debt, while the six complete market closures represent an additional $12.8 million in supply and $4.1 million in debt.

Aave Targets Reserves With Limited Activity

Most assets included in the proposal have either remained below Aave's required usage thresholds or experienced significant declines in deposits. Each reserve imposes ongoing operational costs on the protocol, including maintaining price oracles, monitoring risk parameters, and ensuring reliable liquidations.

LlamaRisk argued that reserves whose activity no longer justifies these costs should be wound down rather than maintained indefinitely.

The scope encompasses bridged assets such as USDC.e and USDbC in markets where native USDC is already available. Other special cases include MaticX, which is being discontinued by its issuer, and matured Pendle tokens that no longer generate yield.

Among the largest individual positions affected are $32.2 million held in matured Pendle tokens on Plasma, $11.1 million in FBTC on Ethereum, and $5.3 million in eBTC. Aave is also targeting assets including DAI on Arbitrum, USDC.e on Polygon, WBTC.e on Avalanche, and several smaller reserves across Ethereum, Base, Optimism, Gnosis, BNB Chain, and MegaETH.

Six Aave Deployments to Be Retired

The six complete market closures were selected after activity and protocol revenue fell below the levels necessary to justify maintenance costs. The decision underscores a broader challenge for DeFi protocols that expanded aggressively across emerging Layer 2 and alternative Layer 1 networks, where user adoption and liquidity have not always kept pace with deployment costs.

Deposits on Aave's Sonic deployment dropped 74% over six months to $7.6 million, while the Scroll market contracted 86% to $2.2 million. Deposits on zkSync fell 88% to approximately $844,000. Metis declined 79% to $297,000, and Soneium deposits plunged 95% to $173,000.

Aptos currently holds approximately $1.7 million in supplied assets and $719,000 in debt, with available liquidity across its reserves having fallen roughly 94% over six months.

LlamaRisk estimated that Sonic, Scroll, and zkSync each generate less than $5,000 in protocol revenue per quarter at current balances. Metis, Soneium, and Aptos each generate less than $1,000 per quarter. The review concluded that this revenue fails to cover the costs of maintaining price feeds, monitoring risks, and providing operational support.

Users Will Be Given Time to Exit Positions

Aave intends to wind down the affected reserves gradually rather than closing user positions immediately. The standard process involves freezing each reserve and reducing its supply and borrowing caps to one. Freezing prevents users from creating new deposits, loans, or collateral positions while allowing existing positions to remain open.

For reserves with outstanding loans, Aave may increase the reserve factor, directing a larger share of interest payments to the protocol treasury and reducing returns for depositors. This mechanism is designed to incentivize suppliers to withdraw and borrowers to repay.

For the six complete market closures, reserves carrying outstanding debt will generally have their reserve factor raised to 99%, with the base borrowing rate set at 5%. Aave may subsequently raise borrowing rates further or gradually reduce liquidation thresholds for borrowers who do not unwind their positions.

Once remaining exposure has declined sufficiently, the protocol plans to replace live price feeds on the retired deployments with fixed price oracles, enabling the markets to be fully discontinued.

Kulechov emphasized that Aave will continue conducting continuous risk assessments for assets across all of its deployments. The rollout of the new Aave Risk Framework and Technical Asset Listing Framework suggests that additional reserve reviews and listings will follow a more structured cost-benefit evaluation going forward.