Aave, one of the largest decentralized lending protocols in crypto, is weighing a sweeping cleanup of its V3 markets across multiple blockchain networks. A new governance proposal would wind down all V3 markets on six chains and remove dozens of low-use token listings, in a move designed to reduce the protocol's risk exposure and focus resources on higher-performing deployments.
According to a proposal filed by risk management service LlamaRisk, working alongside other Aave service providers, the cleanup would cover $98.1 million in supplied assets and $15.6 million in debt. The proposal recommends offboarding 50 low-use reserves and 21 matured Pendle principal token listings across 11 deployments. It also suggests retiring all 25 reserves on Sonic, Scroll, zkSync, Metis, Soneium and Aptos.
The proposal is an ARFC, or Aave Request for Comments, which is a detailed preliminary step before an Aave Improvement Proposal (AIP) is created. An ARFC is not, by itself, proof of a completed onchain vote or execution. It is a formal mechanism used by the Aave community to gather feedback before any final governance action is taken.
Background and context
Aave is a decentralized, non-custodial liquidity protocol that allows users to lend and borrow a wide range of cryptocurrencies. It operates on multiple blockchain networks, known as deployments, each with its own market parameters and asset lists. V3 is the latest major version of the protocol, introducing features such as isolation mode, efficient interest rate curves, and improved risk management tools.
Over the years, Aave has expanded to a variety of layer-1 and layer-2 networks, including Ethereum, Polygon, Arbitrum, Optimism, and others. This multichain strategy was intended to increase accessibility and capture liquidity from different ecosystems. However, some deployments have underperformed, with low usage, low revenue, and rising maintenance costs.
The proposal from LlamaRisk is part of a broader effort to tighten Aave's risk framework and ensure that every supported market meets minimum performance thresholds. This is not the first time Aave has considered closing underperforming markets, but the scale of this proposal makes it one of the most significant cleanups in the protocol's history.
Aptos exit follows recent launch
The proposed exit from Aptos is particularly notable because Aave launched its V3 market there only 11 months ago. According to LlamaRisk, available liquidity on Aptos has fallen by 94% over six months, and quarterly revenue is below $1,000. These figures illustrate how quickly a deployment can become unviable if user interest fades or network activity fails to materialize.
Aptos is a layer-1 blockchain that uses the Move programming language, designed for high throughput and low latency. It attracted significant attention and investment when it launched, but its DeFi ecosystem has struggled to maintain momentum. Aave's decision to consider winding down its Aptos market reflects the broader challenges facing newer blockchains in attracting sustainable liquidity.
Every reserve on Scroll, zkSync, Metis and Soneium has already been frozen, meaning no new borrowing or lending positions can be opened there. Sonic and Aptos, however, remained active at the time of the proposal and are now recommended for freezing. Freezing is a risk mitigation step that prevents new activity while still allowing existing positions to be managed.
Governance history
The temp check on Aave's multichain strategy concluded on Dec. 5, 2025, with 923,400 votes in favor and under 1% against. That vote supported increasing the reserve factor on underperforming instances, shutting down the instances on zkSync, Metis and Soneium, and establishing a $2 million annual revenue floor for new instance deployment.
The revenue floor is a key criterion for any new Aave deployment. It ensures that the protocol only invests resources in markets that can generate meaningful activity. This move was intended to prevent the proliferation of low-usage markets that drain governance attention and technical resources.
Scroll was added to the affected protocols later through an accelerated process in April. LlamaRisk filed a direct-to-AIP proposal to freeze every Scroll reserve and raise selected reserve factors, describing the measure as completing Scroll's deprecation after a rapid deterioration in network liquidity and Aave market activity.
This sequence of actions shows that Aave's governance is becoming more proactive in managing the lifecycle of its deployments. Instead of allowing underperforming markets to linger indefinitely, the protocol is now systematically identifying and winding them down.
Risk framework update
Aave also published an updated risk framework on June 9, covering asset, bridge, monitoring and chain risk, as well as criteria for winding down reserves or deployments. This month's announcement indicated that the protocol has effectively adopted those rules, with the proposed cleanup being one of the first major actions under the new framework.
The updated framework introduces more rigorous standards for token listing and ongoing monitoring. It also requires regular risk assessments for all assets across all deployments, with clear thresholds for action when a market underperforms.
LlamaRisk's role in this process is critical. As a risk management service, it analyzes on-chain data, market conditions, and protocol vulnerabilities to provide recommendations to the Aave community. Its assessments are based on metrics such as liquidity, borrowing demand, token price volatility, and network security.
Kulechov's comments
Aave founder Stani Kulechov addressed the proposal in a Thursday post, saying it will “reduce Aave's economic and technical risk surface as part of the new Aave Risk Framework and Technical Asset Listing Framework.” His comments underline the strategic rationale behind the cleanup.
Kulechov made clear that this is not a reversal of Aave's multichain expansion strategy, but rather a strategic refocusing on select protocols. “Aave will continue applying continuous risk assessment for all assets across all deployments,” he said. This suggests that while Aave remains committed to operating on multiple chains, it will do so with stricter performance criteria.
The comments also follow Aave launching on Avalanche earlier this month. That launch indicates that Aave is still actively pursuing new opportunities, but only in ecosystems that meet its newly defined standards.
Implications for DeFi
The proposed wind-down has broader implications for the decentralized finance sector. It highlights the growing importance of risk management in DeFi, where protocols are increasingly being forced to make hard choices about where to allocate their resources.
For users, the winding down of markets means that they will need to close positions and withdraw assets. Aave has established procedures for this, including freezing, then adjusting reserve factors to encourage repayment, and finally enabling a claim process for leftover assets.
The focus on revenue floors and performance thresholds is likely to become a template for other lending protocols. Many DeFi platforms have expanded rapidly without a clear plan for managing underperforming deployments, and they may adopt similar frameworks to maintain efficiency.
At the same time, the proposal is a reminder that DeFi governance is a dynamic and often complex process. Proposals like this require deliberation, community input, and careful execution to protect user funds and protocol health.
As Aave continues to mature, it is clear that the era of unchecked multichain expansion is over. The protocol is now prioritizing sustainability, risk management, and efficiency over mere presence in as many ecosystems as possible.
Source:Cointelegraph News