# \[ARFC\] Aave Risk Framework

**URL:** <https://governance.aave.com/t/arfc-aave-risk-framework/25114>\
**Category:** Risk\
**Created:** [June 9, 2026, 10:56am UTC](https://governance.aave.com/t/arfc-aave-risk-framework/25114 "2026-06-09T10:56:32Z")\
**Posts on this page:** 1\
**Showing post:** 7

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**Author:** ![Kazuki](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/kazuki/32/15074_2.png) [@Kazuki](https://governance.aave.com/u/Kazuki)\
**Post date:** [June 18, 2026, 12:45am UTC](https://governance.aave.com/t/arfc-aave-risk-framework/25114/7 "2026-06-18T00:45:40Z")

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@chainza — agreed it’s a separate layer. The part worth adding is that the layer needs a substrate that isn’t a first-class artifact yet.

Two things sit inside §1.9/§1.11 and are easy to conflate:

**1 — The neutral cross-protocol surface (the map).** From a shared reserve / collateral / verifier set: who across protocols inherits it, and where a break propagates. rsETH is the obvious example — the exposure that mattered ran through a shared WETH reserve and the looped positions on it, none of it visible from inside any single protocol.

Figure 1 — T-1 (pre-incident)

 ![ninja-dependency-graph-t-1](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/71a35236154f99097bcb779b710ffb9e4359cd44.jpeg)

_Pre-incident. The dependency between rsETH, Aave’s shared WETH reserve, and the Fluid Lite positions exists but is latent — from inside any single protocol these look isolated._

Figure 2 — T+2 (into the incident)

 ![ninja-dependency-graph-t2](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/2/2db9af7a0d0c99750c1b53ac0993daea40b502f7.jpeg)

_T+2 into the incident. The latent edges are now live: impairment propagates rsETH → shared WETH reserve → Fluid Lite vault → downstream holders. The cross-protocol surface a static, single-protocol view never shows._

This horizontal piece is the one no single protocol can own — by definition it lives between them, and it isn’t a first-class artifact in any framework yet. That’s the gap I’d close first.

**2 — Forward stress on that surface (the simulation).** Running the position math forward into the close-factor cascade you describe. Worth being precise about ordering: a stress-sim is only as good as the surface it runs on — you can’t simulate edges no one has mapped, and a single-protocol sim misses exactly the cross-protocol edges that carry these events. So it’s map → simulation, not either/or.

Concretely I’d frame it as three stages, not one:

- **(1) Establish the neutral map as first-class** — the shared reserve / collateral / verifier sets and who inherits them across protocols.
- **(2) Scenario path-tracing** — freeze or impair an asset / verifier set and follow where the break propagates, and in what order. Deterministic.
- 

**(3) The quantitative model you’re describing** — position math forward into the close-factor dynamics. The genuinely new engine, built on (1)+(2).

I’ve reconstructed the rsETH episode cross-protocol and am glad to walk @LlamaRisk, or anyone speccing §1.9/§1.11, through it.  
The constraint I’d keep first-class throughout: this only works if the map is neutral — no single protocol can map the exposure it shares with its competitors.

–– Kazuki Kaneshiro, ZKSC / Ninja

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