Aave founder Stani Kulechov said on July 30 that the lending protocol plans to retire dozens of low-use asset reserves and wind down its deployments on six blockchain networks.
Summary
- Aave proposal targets six deployments holding $12.8 million supplied and $4.1 million in outstanding debt.
- Fifty low-adoption reserves and twenty-one matured Pendle tokens account for most assets under review today.
- Users can retain existing positions initially, but freezes and higher rates will encourage orderly exits.
The changes cover approximately $98.1 million in supplied assets and $15.6 million in debt. However, the measures originate from an Aave governance proposal and require DAO approval before full implementation.
The proposal would remove 50 individual reserves, retire 21 matured Pendle principal tokens and close 25 reserves across Sonic, Scroll, zkSync, Metis, Soneium and Aptos.
Aave’s six smaller markets have lost most deposits
The six complete deployments hold $12.8 million in combined supply and $4.1 million in debt. Sonic is the largest, with $7.6 million supplied and $2.7 million borrowed. Its deposits have fallen 74% over six months.
Scroll deposits declined 86% to $2.2 million, while zkSync fell 88% to $844,000. Metis and Soneium dropped to $297,000 and $173,000, respectively. Aptos liquidity fell 94% over six months, leaving $1.7 million supplied and $719,000 borrowed.
LlamaRisk said these deployments generated too little revenue to cover the cost of maintaining price feeds, monitoring systems and operational support. That conclusion reflects the risk provider’s assessment and remains subject to governance review.
Fifty reserves face removal across larger deployments
The remaining proposal targets 50 low-adoption reserves and 21 matured Pendle principal tokens across 11 Aave deployments. Together, they account for $85.3 million in supplied assets and $11.5 million in debt.
Assets marked for removal include low-use collateral, older bridged tokens and duplicate versions of assets that now have native alternatives. For example, bridged USDC variants would be removed from some markets where native USDC is already available.
The largest affected positions include the FBTC and eBTC wrappers on Ethereum. Together, they hold about $16.3 million in supply but only around $63,000 in borrowing. Their balances have fallen sharply because the expected demand for using them as collateral did not develop.
As previously reported, Aave DAO began exploring Pendle principal tokens in 2025. The latest proposal would retire 21 tokens that have reached maturity while allowing newer maturities to replace them where appropriate.
Aave would initially freeze affected reserves and reduce supply and borrowing caps to one unit. Existing positions could remain open, but users would be unable to make new deposits, borrow more funds or use the affected assets as fresh collateral.
For markets with outstanding loans, the proposal would raise the reserve factor, directing more interest to the Aave treasury and reducing returns for suppliers. Whole-market closures would use a 99% reserve factor and a 5% base borrowing rate to encourage borrowers to repay and depositors to withdraw.
If borrowers do not repay, risk managers could raise borrowing rates further. Liquidation thresholds may also be reduced gradually when officials determine that remaining collateral positions create excessive exposure.
Once positions have largely unwound, Aave plans to replace live price feeds with fixed-price oracles before completely retiring the six markets.
DAO approval remains the next step
The proposal is currently at the Aave Request for Comment stage. Under the standard governance process, an ARFC normally proceeds to an off-chain Snapshot vote before reaching a binding Aave Improvement Proposal and on-chain vote.
Therefore, users do not need to close their positions immediately solely because of Kulechov’s announcement. The exact implementation schedule will depend on community feedback, voting and the preparation of the required technical transactions.
The move marks a retreat from Aave’s earlier push to deploy broadly across emerging networks. Aave previously expanded to Linea after receiving DAO approval.
At the same time, the protocol is concentrating resources on Aave V4, institutional markets and higher-use deployments. As crypto.news reported, the DAO approved $25 million in funding to support that strategy.
Aave remains the largest decentralized lending protocol, with about $14.5 billion in total value locked across 23 chains.
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