AAVE News
Aave (AAVE), the largest decentralized lending protocol by locked value, is weighing a governance proposal to withdraw from six blockchains that each generated less than $5,000 in quarterly revenue. The affected networks are Sonic, Scroll, zkSync, Metis, Soneium and Aptos, and the plan also would clean up low-use asset markets and 21 expired Pendle principal-token listings across 11 deployment environments. The proposal, drafted for governance review, does not call for forced liquidations. Instead, it would stop new deposits, new borrows and new collateral use, then set supply and borrow caps at one token to encourage users to close positions voluntarily. Borrow interest would be routed 99% to the protocol treasury, with a base borrow rate of 5%. On-chain data and protocol revenue estimates show why the cleanup is being pursued: the six chains together hold about $13 million in deposits, while the broader deprecation package could touch roughly $98 million in supplied assets. That is a small slice of a platform that holds about $14 billion across all deployments, but the operating burden is not small. Each listed market still requires price feeds, liquidation monitoring and security oversight. The Ethereum mainnet deployment generates more than $142 million in annualized revenue, while Base produces about $4.7 million. Metis, by comparison, produced only about $3,000. Over the past year, borrowers paid roughly $888 million in interest, of which the protocol retained about $117 million, or 13%. The cleanup also follows weaker quarterly numbers: total revenue fell from $198 million in the first quarter to $156 million in the second, and liquidation revenue dropped from $27 million to less than $200,000 in the first month of the third quarter. For the AaveDAO, the move is less a retreat from expansion than a portfolio pruning exercise, after the protocol previously set a $2 million annual-revenue threshold for new deployments. It also reduces tail risk from dormant markets that can become costly to maintain during a bear market.
Aave founder Stani Kulechov confirmed that Scroll, zkSync and Aptos are among the smaller deployments slated for full closure, framing the move as part of a broader revenue-driven portfolio review. The governance filing drafted by risk manager LlamaRisk is more specific: it outlines a two-track deprecation that would remove about $98.1 million in supplied assets and $15.6 million in outstanding debt from low-adoption reserves. The first track covers individual reserve withdrawals across 11 Aave V3 deployments, including 50 reserves and 21 matured Pendle principal tokens, with roughly $85.3 million supplied and $11.5 million borrowed. The second track would shut six entire markets, covering 25 additional reserves with about $12.8 million supplied and $4.1 million borrowed. The chain-level exposure is modest: Sonic has about $7.6 million supplied, Scroll $2.2 million, Aptos $1.7 million, zkSync $0.8 million, Metis $0.3 million and Soneium $0.2 million. Against Aave’s $14.47 billion in total value locked and about $116.6 million in annualized revenue, those figures are immaterial, but the maintenance costs are not. Each reserve still needs oracle coverage, risk-parameter monitoring and liquidation pathways. The proposal remains subject to a DAO vote, and no freeze or pricing change takes effect until token holders approve it. A companion LlamaRisk proposal targets long-tail assets flagged by Chainlink as having high or very high operational risk because underlying tokens have lost enough liquidity to make pricing unreliable. That package involves 10 deployments with $6.76 million supplied and $4.29 million borrowed; rather than shutting feeds immediately, it would freeze reserves, cut caps to one and replace live oracles with static price adapters so remaining loans can be liquidated safely. The review also overlaps with Aave’s V4 expansion: deposits on V4 nearly doubled month over month, and deposit and borrow limits were raised for the 11th time. For the altcoin lending market, the message is that even the largest protocol is now prioritizing institutional-grade and revenue-producing markets over experimental appchain deployments.
COINOTAG’s proprietary 42-indicator composite S/R scoring engine rates AAVE’s $102.60 resistance at 63/100, driven by Donchian Upper and swing-high confluence, while the $98.72 support scores 62/100 from VWAP and Ichimoku Tenkan. With spot at $100.03, RSI at 58.11 and MACD bullish, the broader uptrend favors a break above $102.60 toward $105.61 if funding stays mild at 0.0008% and $129.3 million open interest does not spike. With no long/short ratio supplied, funding and open interest guide positioning. A loss of $98.72 would expose the stronger $93.05 support, rated 70/100, invalidating the near-term bullish thesis. That floor draws on S2 and high-volume-node confluence, while Fear and Greed at 28 shows cautious sentiment despite the technical improvement.