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Aave to wind down six V3 deployments as costs exceed revenue
Aave’s risk provider, LlamaRisk, recommends freezing all reserves and redirecting nearly all borrower interest to the Aave treasury after supply and borrow caps are cut to 1.
Aave is considering a wind down of its V3 deployments on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos, according to a July 29 forum-stage proposal reviewed by CryptoSlate. The plan outlines a staged exit path that keeps existing positions open at the start while moving toward a full freeze of new activity.
In the proposal’s initial step, LlamaRisk places $4.1 million of debt on an exit trajectory, supported by data dated July 28. The Aave Request for Final Comments, or ARFC, also covers 25 lending reserves with $12.8 million supplied, with the discussion still active in the forum thread on July 31.
LlamaRisk’s economic rationale is that operating and support costs, including oracle, monitoring, and operational support, are higher than the deployments’ protocol revenue. It estimates Sonic, Scroll, and zkSync each generate less than $5,000 in quarterly protocol revenue at current balances, while Metis, Soneium, and Aptos each generate less than $1,000.
For the six full-market exits, the proposal says every reserve would be frozen and supply and borrow caps cut to 1. Reserves carrying debt would also receive a 99% reserve factor and a 5% interest rate model base variable rate, which is designed to direct nearly all interest paid by borrowers to the Aave treasury and leave little for supplier yield. The lifecycle includes an ARFC stage before a Snapshot and any executable on-chain governance step.