LlamaRisk proposes repositioning Aave V3 Core, Aave's largest market, to focus on liquid, blue-chip collateral. The proposal would remove several categories of exposure: 1.…
Original source excerpt
LlamaRisk proposes repositioning Aave V3 Core, Aave's largest market, to focus on liquid, blue-chip collateral. The proposal would remove several categories of exposure: 1. Restaking assets 2. Lever…
LlamaRisk proposes repositioning Aave V3 Core, Aave's largest market, to focus on liquid, blue-chip collateral. The proposal would remove several categories of exposure: 1. Restaking assets 2. Leveraged wrapping strategies 3. Issuers whose operational and security resources fall short of Aave's risk standards 4. Low-demand reserves that no longer justify ongoing maintenance This means potentially moving $1.52B in collateral backing $1.17B in debt out of V3 Core in favour of blue-chip collateral. As the risk landscape evolves and Aave V4 grows, the goal is to sharpen V3 Core's risk profile and raise the bar for collateral eligibility. Some affected assets could transition to isolated Aave V4 markets, where more granular risk controls allow for better risk-reward alignment. The proposal comes from LlamaRisk, an Aave Protocol Risk Manager, and remains subject to governance discussions and engagement with asset issuers. Aave will continue applying continuous risk assessment for all assets across all deployments.
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