Aave is tightening its protocol's risk management standards. Aave founder Stani Kulechov said the team has spent the past several weeks developing a new risk framework covering the assets themselves, cross-chain bridges, the blockchains where they are deployed, and automated monitoring capabilities.
If approved, this framework will apply to all assets and markets on Aave. Under the currently disclosed arrangements, assets that do not meet the new standards will be removed from Aave in the coming weeks.
Four layers of risk controls are simultaneously tightened.
The new framework primarily consists of four parts.
- Asset risk: involves due diligence, monitoring, listing review, and potential delisting.
- Cross-chain Bridge Risk: Establish Security Standards for Assets Transferred Across Chains
- Automated Risk Alerts: For identifying new threats and continuous monitoring
- Chain risk: Assess whether a particular chain is suitable for deploying Aave and set maximum risk exposure.
Based on the disclosure, Aave is no longer evaluating only individual tokens but is also incorporating the security of bridging infrastructure and underlying blockchains into its unified assessment. This means assets that rely on cross-chain liquidity may face stricter admission criteria in the future.
The April rsETH event served as the catalyst.
This adjustment is directly related to a major exploit in April, during which the KelpDAO rsETH cross-chain bridge based on LayerZero was compromised, resulting in the loss of approximately 116,500 rsETH, valued at around $290 million at the time.
Since the attacker subsequently deposited a significant portion of the stolen assets into Aave V3, the impact of the incident extended to the Aave protocol itself. Although the original report did not disclose more detailed outcomes, this event clearly prompted Aave to reassess the overall risks associated with cross-chain assets and deployment environments.
V3, V4, and Horizon will all apply.
Currently, assets listed on Aave V3, V4, and Aave Horizon will all be subject to these new requirements.
- Underlying blockchain where the asset resides
- Cross-chain bridge infrastructure security
- Issuer behavior
- Ongoing monitoring requirements
This means that the protocol’s future listing and retention criteria will prioritize standardization and ongoing monitoring, rather than relying solely on a one-time review before listing.
Meanwhile, AAVE fell 2.16% over the past 24 hours to $60.95. Aave’s total value locked also decreased by over $170 million this week to approximately $14.75 billion, a notable decline from the level of over $25 billion in mid-April.