Aave Eyes Major Cleanup With Plan to Retire Low-Usage Assets and Networks
Aave is preparing one of its largest protocol cleanups to date after unveiling a governance proposal that would retire dozens of little-used assets and discontinue support for several blockchain deployments. If approved, the plan would impact roughly $98.1 million in supplied assets and $15.6 million in outstanding loans across the lending platform.
The proposal, announced by Aave founder Stani Kulechov, was developed by risk management provider LlamaRisk following a comprehensive review under Aave's newly introduced Risk Framework. Rather than responding to a specific exploit or market event, the assessment examined the protocol as a whole, identifying assets and networks that no longer meet the platform's long-term standards.
Under the proposal, Aave would remove 50 low-usage reserves along with 21 matured Pendle Principal Tokens (PTs) spread across 11 Aave V3 deployments. In addition, the protocol plans to wind down operations on six smaller blockchain networks: Sonic, Scroll, zkSync, Metis, Soneium, and Aptos.
The reserves scheduled for removal currently hold around $85.3 million in supplied liquidity and $11.5 million in outstanding debt. The six blockchain deployments targeted for retirement account for another $12.8 million in supplied assets and $4.1 million in borrowed funds.
According to the proposal, the move is designed to reduce the operational burden of supporting assets that see little activity. Every reserve requires ongoing maintenance, including price oracle updates, liquidation infrastructure, and continuous risk assessments. For assets with limited adoption, those costs increasingly outweigh their value to the protocol.
The review also identified several categories of assets that no longer fit Aave's evolving strategy. These include bridged tokens that duplicate existing native assets, Pendle PTs that have already matured and stopped generating yield, and smaller blockchain deployments where protocol revenue is insufficient to justify continued support.
To facilitate an orderly transition, Aave plans to gradually restrict activity on affected markets. New deposits and borrowing would be frozen, while supply and borrow caps would be reduced to a single unit. Reserve factors on borrowable assets would also increase, making the markets less attractive over time.
For the blockchain deployments slated for retirement, the protocol proposes even stronger measures. Reserve factors would be increased to 99%, while higher base interest rates would encourage users to close outstanding positions and migrate their funds elsewhere.
The governance proposal follows Aave's broader effort to strengthen its risk management practices after the approximately $292 million KelpDAO bridge exploit earlier this year. That incident raised concerns about potential bad debt after compromised rsETH was deposited as collateral on the protocol.
In response, Aave introduced a new Risk Framework in June that establishes stricter standards for listing assets, conducting routine reviews, and deciding when markets should be removed. Kulechov previously said the framework would become the foundation for managing assets across Aave V3, the upcoming Aave V4, and Aave Horizon.
LlamaRisk has also submitted a separate governance proposal aimed at another group of long-tail assets. Those reserves have been flagged because of increased reliance on potentially vulnerable Chainlink price feeds, with the proposal recommending fixed-price adapters as a safer alternative.
Following news of the governance proposal, AAVE traded around $95.52, down approximately 2.8% over the previous 24 hours as investors evaluated the potential impact of the protocol's restructuring plans. While the proposal reduces Aave's footprint across several markets, supporters argue it could leave the protocol leaner, easier to maintain, and better positioned for future growth.