[ARFC] Repositioning Aave V3 Core Around Established & Liquid Collateral
- Published
- Updated
LlamaRisk proposed narrowing Aave V3 Core to liquid, blue-chip collateral while shifting broader asset coverage to Aave V4. Separate coverage says the plan would freeze affected reserves first and let existing borrowers keep loans open while they move collateral or migrate to V4, and it puts the planned exit from Aave Core at about $1.33 billion.
Key claims & sources
What it means
Aave V3 Core currently hosts a wide range of collateral types across many assets, after earlier deprecation work wound down low-adoption reserves and instances. LlamaRisk, the DAO's risk adviser, now proposes splitting the market by risk profile: Core restricted to liquid, blue-chip assets, with riskier or niche collateral moved to the forthcoming Aave V4, which introduces a Risk Premium parameter and tighter isolation controls for pricing extra risk asset-by-asset.
On Nov. 10, LlamaRisk asked Aave to freeze three specific tokens - StakeWise's osETH, Lombard's LBTC and Rocket Pool's rETH - plus six smaller reserves, on V3 Core. Existing borrowers keep their loans open but can no longer deposit frozen assets as new collateral, so they must swap into liquid blue-chip tokens already in Core or shift positions to V4 once it launches. Protocols behind frozen tokens lose a distribution channel on Aave's flagship market.
The immediate marker is how Aave governance disposes of LlamaRisk's Nov. 10 ARFC covering osETH, LBTC, rETH and six small reserves - a Snapshot vote and subsequent AIP will show whether the freezes proceed as proposed, get narrowed, or stall. A yes vote moves roughly $1.33 billion of collateral toward migration ahead of Aave V4's launch; rejection would leave Core's asset mix unchanged for now.
Market reaction i
Aave rose 1.0% in the 4 hours after the first headline, after a flat 2 hours before.
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Coverage timeline
Every piece in order, with the time its news medium declares — if it is not believable we use ours and say so — and what it added to what was already known at that point. Arriving first is not the same as adding something.
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Has this happened before?
| When | What happened | Figure |
|---|---|---|
| 16 days ago | How Aave’s Variable Borrow Rate Changes an Existing USDT Loan event | 1 actors in common · 2 news media |
| 30 days ago | [ARFC] Onboard Native BTC as Collateral to Aave V4 via Babylon Trustless Bitcoin Vaults event | 1 actors in common · 8 news media |
| 38 days ago | Aave Activates LlamaRisk Agents for Pendle Collateral on Plasma event | 1 actors in common · 2 news media |
| 39 days ago | Aave Proposal Would Raise GHO Borrowing Rates as Reserves Run Low event | 1 actors in common · 4 news media |
| 42 days ago | [ARFC] The Aave Foundation, Phase 1 event | 1 actors in common · 6 news media |