Aave Proposes Wind-Down of Six Low-Revenue V3 Markets

• Aave governance is reviewing a proposal to wind down V3 markets on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos.
• The proposal targets $98.1 million in supplied assets and $15.6 million in debt across these networks.
• LlamaRisk recommends the exit because quarterly revenue under $5,000 fails to cover oracle and monitoring costs.
• The staged exit involves freezing new activity and redirecting borrower interest to the treasury to encourage withdrawals.

Aave governance is currently reviewing a Request for Final Comments (ARFC) to wind down six lower-adoption V3 markets and offboard dozens of individual reserves . The proposal targets markets on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos, alongside 50 low-use reserves and 21 matured Pendle Principal Tokens . These affected markets hold $98.1 million in deposits and $15.6 million in debt, representing less than 1% of Aave’s total deposits .

Crucially, these markets generate less than $5,000 in quarterly revenue, which is insufficient to cover the operational costs of oracle support and risk monitoring . This proposal signals a transition in DeFi from aggressive expansion to focused maintenance, prioritizing cost efficiency over broad chain footprint . The protocol is shifting toward a mature phase focused on operational discipline, reducing its economic and technical risk surface .

The primary driver for this cleanup is economic inefficiency. These low-adoption markets generated less than $5,000 in quarterly protocol revenue, a figure insufficient to cover the costs of oracle feeds, monitoring, and operational support . For comparison, Aave's Ethereum mainnet generates over $142 million annually, and Base produces roughly $4.7 million . Liquidity on the exit chains has collapsed significantly over the past six months, with Soneium falling 95% and Aptos 94% .

How Will Aave Manage the Exit Process?

The wind-down strategy is staged to minimize immediate liquidation risk for existing users. The initial step involves freezing new supply and borrowing, cutting supply and borrow caps to 1 . Existing positions remain open during this phase to avoid triggering forced liquidations .

For reserves carrying debt, a 99% reserve factor and a 5% base variable rate model will be applied . This structure directs nearly all borrower interest to the Aave treasury, leaving little for supplier yield to encourage withdrawals . The reduction in supplier yield is designed to encourage existing depositors to withdraw funds, thereby increasing utilization .

Later stages of the proposal may involve raising interest rate curves, gradually reducing liquidation thresholds, and replacing dynamic oracles with fixed-price adapters for affected assets . This approach preserves stronger levers for later steps if balances remain after the initial freeze . The ARFC process allows the community to review the wind-down plan before execution, ensuring a gradual and transparent exit .

Why Is Aave Reducing Its Multichain Footprint?

Aave founder Stani Kulechov announced a strategic risk overhaul involving the reduction of 50 low-adoption asset reserves and the winding down of operations on six blockchains . This initiative is part of a new Aave risk framework designed to decrease monetary and technical risks . The cleanup targets assets that have failed to generate sufficient revenue to justify the ongoing costs of oracle maintenance and risk monitoring .

Each deployment requires ongoing risk monitoring, parameter updates, and emergency response capabilities . When a market is barely used, these costs outweigh the benefits . Small markets pose significant risks despite their size, as thin liquidity complicates liquidations and low revenue may not justify the resource allocation for risk analysis .

If a small market fails, the protocol’s brand still suffers, creating unnecessary operational risk . By offboarding low-use reserves, Aave prioritizes the security and manageability of its core infrastructure . This disciplined approach suggests a broader industry trend where more deployments no longer equate to more value, but rather to potential complexity that must be cleaned up .

The protocol also plans to remove bridged assets that duplicate native listings, further streamlining its asset framework . This move reflects a maturing regulatory nuance and a shift from expansion to consolidation . Future expansions will need to meet higher revenue bars, ensuring that new chains justify the operational and regulatory burden they create .

The broader cleanup aims to reduce operational complexity and focus resources on higher-productivity markets . This strategic refocusing allows Aave to prioritize larger, more productive markets, strengthening the protocol's core infrastructure while managing the operational burden of a fragmented multichain presence . The token’s sensitivity to governance news creates volatility risk, but resolution of disputes could solidify AAVE’s status .

The proposal affects approximately $98.1 million in supplied assets and $15.6 million in outstanding debt . This represents a small fraction of Aave's total assets, which stand at approximately $14.59 billion . The governance token AAVE is trading around $99.54, reflecting market reactions to these strategic shifts .