[Direct-to-AIP] Reserve Factor Updates Across Aave V3 and V2 Markets

Aave’s reserve factor is the share of lending income that flows to the protocol rather than to depositors, and TokenLogic’s proposal touches that setting across a wide set of markets. The update spans Aave V3 deployments and the older Aave V2 Ethereum market, which makes it a governance-level adjustment rather than a small parameter tweak. It is being framed around balances and rates from 9 November 2026, so the discussion sits inside Aave’s ongoing effort to tune market economics as conditions change.

For users and builders, reserve-factor changes alter how lending revenue is split inside Aave markets, so they matter to deposit returns and DAO income at the same time. If governance adopts the proposal, market participants on the affected reserves would have to operate under the new split rather than the current one. That makes the vote relevant not only to AAVE holders and delegates, but also to teams that rely on Aave for liquidity routing and treasury planning.

A proposal that lifts protocol take from lending markets highlights a trade-off that sits at the center of DeFi governance: more revenue for the DAO versus less distributed to lenders. Aave has chosen to manage that trade-off through parameter votes across many reserves, which keeps the system flexible but also makes core economics subject to repeated governance adjustment. The question is not just who gets the cash flow, but how much discretion a protocol should have over the terms set for market users once liquidity is already in place.

What remains open is whether Aave governance accepts the reserve-factor changes and, if it does, how the revised settings play out across the 54 reserves named in the proposal. The material does not show final approval or an implementation date, so the next concrete step is the governance decision itself. It also leaves open whether the model’s estimate of $3.5 million in added annual revenue matches actual results after any change is activated.

Aave fell 0.7% in the 4 hours after the first headline, after falling 0.7% in the 2 hours before.

47 prices, one every 30 minutes · The move was larger before the first headline than after: an observation, not an explanation. The market also moves on things nobody publishes.