[ARFC] Repositioning Aave V3 Core Around Established & Liquid Collateral

Aave has been working through a wider deprecation path, and this proposal fits into that shift from a broad lending surface toward a narrower core. Aave V3 Core is being defined more tightly around established collateral, while Aave V4 is being set up to take on more varied assets with different risk treatment. That makes the protocol’s structure easier to understand for users who need to know where each asset belongs.

For borrowers and suppliers on Aave V3 Core, the practical change is that frozen reserves would no longer accept normal new activity while existing loans remain live. Users holding collateral in the affected reserves would need to change their setup or move positions into V4 if they want to stay within Aave’s lending system. The shift also puts more responsibility on users to track which market they are using, because the protocol is being split more clearly by asset type.

The trade-off here is between simplicity in the core market and broader asset support elsewhere in the protocol. Aave is making room for blue-chip collateral in one place and more experimental or less standard assets in another, which can reduce clutter but also makes the protocol more segmented. That separation reflects a common DeFi tension: one market wants to stay predictable, while the other has to accommodate more risk with finer controls.

The remaining open point is the final migration path for the reserves and how smoothly borrowers can move before the freeze becomes binding. The proposal does not settle how many users will switch collateral versus migrate to V4, and it does not name the exact sequence for each reserve. It also leaves open how the broader deprecation work will be completed once these core reserves are wound down.

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