Summary
LlamaRisk proposes deprecating Chainlink price feeds for a set of long-tail assets deployed across Aave V2 or V3 reserves, feeds that Chainlink itself has classified as high or very high operational risk as the underlying assets have lost meaningful adoption and liquidity, leaving too little trading activity to price them reliably. The set spans 10 deployments, part of which are already deprecated, with aggregate affected supply of $6.76M and aggregate debt of $4.29M.
Previously applied as part of Aave V2 Continued Deprecation Steps, this round of changes expands to some of the Aave V3 deployments, as these assets have already been deprecated for an extended period of time and continue to experience a decline in adoption, which in turn affects the stability of the secondary market price feeds employed by Chainlink. Deprecating troubled or inactive reserves is a standard, well-established part of Aave governance. The same process has been applied to other assets before, including the full deprecation of DPI across Aave deployments and the TUSD offboarding plan, and this proposal follows the same playbook.
Motivation
The reserves in scope share a common deprecation reason: each underlying asset has either lost meaningful adoption or held its peg only intermittently over a sustained period, and in several cases both. As activity migrated away, secondary market liquidity thinned to the point where the asset’s market price is no longer a dependable input for valuing collateral and debt on a lending protocol. Pricing a thinly traded or persistently depegged asset from its live market feed is inherently fragile, because the reported value can drift well away from any defensible fair value and can be moved by a small amount of trading volume.
For this reason Chainlink has classified the price feeds behind these reserves as high or very high risk meaning that they should no longer be used to price assets on Aave. Continuing to mark positions against a feed whose underlying market has deteriorated leaves the protocol exposed to stale or manipulable valuations, which on a lending market translate directly into mispriced collateral, unfair liquidations, or debt that is no longer fully backed.
These reserves nonetheless still carry live positions on Aave, held as collateral, as debt, or both, so the feeds cannot simply be switched off. Each reserve instead requires an individual remedy: the live oracle is replaced with a fixed-price adapter and paired with a controlled set of parameter changes so the remaining positions can be wound down in an orderly fashion. The approach is tailored on a per-asset basis, where the non-frozen assets are also frozen as part of the oracle deprecation.
Aave V3 Reserves & Markets
Twenty-one V3 reserves fall under this round of oracle deprecation. Six carry material exposure and are analysed individually below: LUSD and FRAX on both Ethereum Core and Arbitrum, RPL on Ethereum Core, and USDm on Celo. Together they hold $3.50M of supply and $1.47M of debt, and only $13.0K of the supplied balance is enabled as collateral, so the exposure sits almost entirely on the supply and debt sides rather than in collateral risk. The remaining 15 V3 reserves, spread across Arbitrum, Avalanche, Ethereum, Optimism, Polygon, Scroll and the EtherFi instance, hold a further $231.2K of supply and $48.2K of debt and are handled with the simplified treatment described in the Negligible Exposure Reserves section.
LUSD on Aave V3 Ethereum Core
LUSD is the decentralised, ETH-backed stablecoin issued by the Liquity protocol. On Aave V3 Ethereum Core it carries $2.01M of supply across 127 wallets and $664.7K of debt across 60 wallets. Of that supply, only $12.2K across 15 wallets is enabled as collateral at the current 77% LT.
The active feed is a Chainlink LUSD/USD secondary market price feed used in a stable price cap adapter with a $1.10 price cap, currently reporting a price of $1.00. Hardcoding the oracle to a fixed value removes the price manipulation vector for both the LUSD collateral and LUSD debt without materially repricing the position relative to its current accounting value.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 123 wallets, $1.98M of LUSD, including 11 that have LUSD enabled as collateral but carry no debt.
- Used as collateral backing debt: 4 wallets, $7.4K of LUSD, backing only $160 of borrowing.
- Borrowed: 60 wallets, $664.6K of LUSD debt.
Borrower health
Across the 63 wallets that borrow LUSD or post it as collateral, the median HF is 1.81 and the 10th percentile is 1.03. 6 are already below HF 1, 2 more sit in the [1.0, 1.05] band where a 1% adverse move would tip them into liquidation, and 26 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 LUSD borrowers post $11.40M of collateral between them, almost entirely WETH at $8.02M and WBTC at $3.18M, with a small LINK remainder. LUSD is being borrowed against blue-chip collateral, not held as a directional position.
Source: LlamaRisk, July 28th, 2026
Recommendation
The reserve is frozen and its supply and borrow caps are reduced to one. The oracle is hardcoded at $1.00. Because slope2 only affects the borrow rate once utilization rises above the optimal point, raising it alone would leave the current 2.1% borrow APR at 33% utilization unchanged. The RF is therefore raised from 20% to 99%, redirecting almost all interest income from suppliers to the treasury. With their yield gone, suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is also raised to 5%, a moderate but immediate repayment incentive that applies at every utilization level, and slope2 to 100% so that once utilization does cross the optimal point the borrow rate climbs steeply. As this is the first step of the deprecation, sharper rate increases are deliberately left for a later round.
USDm on Aave V3 Celo
USDm is the Celo-native dollar stablecoin issued by the Mento protocol. On Aave V3 Celo it carries $503.7K of supply across 545 wallets and $451.7K of debt across 20 wallets. None of the supplied balance is enabled as effective collateral as the asset was never allowed to be used as collateral.
The active feed is a Chainlink USDm/USD price feed with the stable cap adapter clamped at the $1.04 reference, while the current oracle price is at $1.00. Hardcoding the oracle to the reference value removes the upward-manipulation vector for the residual debt without affecting current positions.
Position concentration
Supply side: 545 wallets holding $503.7K, with the top five holding 99%. None of it is enabled as collateral, so the whole balance is supply-only. Debt side: 20 wallets holding $435.9K, with the top five holding 100%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 545 wallets, $503.7K of USDm.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied USDm backs borrowing.
- Borrowed: 20 wallets, $435.9K of USDm debt.
Borrower health
Across the 20 wallets that borrow USDm, the median HF is 1.13 and the 10th percentile is 1.03. 1 position is already below HF 1.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 USDm borrowers post $806.0K of collateral, effectively all of it USDT. Borrowing one dollar stable against another points to carry or basis trades rather than directional positions.
Source: LlamaRisk, July 28th, 2026
Recommendation
The reserve is frozen and its supply and borrow caps are reduced to one. The oracle is hardcoded at $1.00. Even at 90% utilization the variable borrow APR is only 4.0%, too low to give borrowers a reason to close their positions. The RF is therefore raised from 15% to 99%, redirecting almost all interest income from suppliers to the treasury. With their yield gone, suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is also raised to 5%, a moderate but immediate repayment incentive that applies at every utilization level, and slope2 to 100% so that once utilization crosses the optimal point the borrow rate climbs steeply. As this is the first step of the deprecation, sharper rate increases are deliberately left for a later round.
RPL on Aave V3 Ethereum Core
RPL is the Rocket Pool governance token. Its market price has fallen substantially over the trailing six months, so the trailing 6 month average sits above current spot. On Aave V3 Ethereum Core it carries $583.6K of supply across 180 wallets and $203.7K of debt across 45 wallets. None of the supplied balance is enabled as collateral, as the reserve’s LT is already zero.
Price dynamics
The active feed is a Chainlink RPL/USD price feed. Trailing 6 month realised annualised volatility is 126.3%, maximum drawdown is 54.7%. Current spot is $1.6104 and the trailing 6 month average is $1.9543. The recommended fixed price of $1.9543 is the trailing 6 month average, 21% above current spot. Fixing the price above spot is deliberate and serves two purposes. First, it protects liquidation execution: if RPL later trades materially above the fixed oracle level, liquidators would have to acquire it on the market at a higher price than the oracle reports for the repaid debt, making liquidations economically unattractive, and the upward buffer absorbs that discrepancy. Second, valuing the outstanding RPL debt above spot pushes marginal borrowing positions closer to liquidation (where the debt is not heavily mixed with other assets), facilitating the unwinding of smaller positions and accelerating the wind-down of the deprecated reserve.
Source: LlamaRisk, July 28th, 2026
Source: LlamaRisk, July 28th, 2026
Position concentration
Supply side: 180 wallets holding $583.6K, with the top five holding 66%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 45 wallets holding $203.7K, with the top five holding 96%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 180 wallets, $583.6K of RPL.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied RPL backs borrowing.
- Borrowed: 45 wallets, $203.7K of RPL debt.
Borrower health
Across the 45 wallets that borrow RPL, the median HF is 7.51 and the 10th percentile is 1.51. 2 sit in the [1.0, 1.05] band where a 1% adverse move would tip them into liquidation. 35 of the 45 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 RPL borrowers post $7.36M of collateral, dominated by a single large tBTC position of $5.68M, with wstETH and WETH covering most of the rest. RPL is borrowed against BTC and ETH majors, likely for shorting or liquidity provision rather than as a directional holding.
Source: LlamaRisk, July 28th, 2026
Recommendation
The reserve is frozen and its supply and borrow caps are reduced to one. The oracle is fixed at $1.9543, the trailing 6 month average. Because slope2 only affects the borrow rate once utilization rises above the optimal point, raising it alone would leave the current 3.7% borrow APR at 35% utilization unchanged. The RF is therefore raised from 20% to 99%, redirecting almost all interest income from suppliers to the treasury. With their yield gone, suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is also raised to 5%, a moderate but immediate repayment incentive that applies at every utilization level, and slope2 to 100% so that once utilization does cross the optimal point the borrow rate climbs steeply. As this is the first step of the deprecation, sharper rate increases are deliberately left for a later round.
LUSD on Aave V3 Arbitrum
LUSD is the decentralised, ETH-backed stablecoin issued by the Liquity protocol. On Aave V3 Arbitrum it carries $192.1K of supply across 214 wallets and $74.8K of debt across 176 wallets. None of the supplied balance is enabled as collateral, as the reserve LT is already zero.
The active feed is a Chainlink LUSD/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, currently reporting a price of $1.005. Hardcoding the oracle to a fixed value removes the upward-manipulation vector for the residual LUSD debt without materially repricing the position relative to its current accounting value.
Position concentration
Supply side: 214 wallets holding $192.1K, with the top five holding 97%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 176 wallets holding $74.8K, with the top five holding 52%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 214 wallets, $192.1K of LUSD.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied LUSD backs borrowing.
- Borrowed: 176 wallets, $74.8K of LUSD debt.
Borrower health
Across the 176 wallets that borrow LUSD, the median HF is 1.65 and the 10th percentile is 1.03. 12 of the dust positions are already below HF 1. 7 more sit in the [1.0, 1.05] band where a 1% adverse move would tip them into liquidation. 73 of the 176 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 LUSD borrowers on Arbitrum post $419.0K of collateral spread across WBTC, WETH and USDT, with no single asset dominating. As on Ethereum, LUSD is borrowed against mainstream collateral rather than held directionally.
Source: LlamaRisk, July 28th, 2026
Recommendation
The reserve is frozen and its supply and borrow caps are reduced to one. The oracle is hardcoded at $1.00. Because slope2 only affects the borrow rate once utilization rises above the optimal point, raising it alone would leave the current 5.2% borrow APR at 39% utilization unchanged. The RF is therefore raised from 50% to 99%, redirecting almost all interest income from suppliers to the treasury. With their yield gone, suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is also raised to 5%, a moderate but immediate repayment incentive that applies at every utilization level, and slope2 to 100% so that once utilization does cross the optimal point the borrow rate climbs steeply. As this is the first step of the deprecation, sharper rate increases are deliberately left for a later round.
FRAX on Aave V3 Arbitrum
FRAX is the dollar stablecoin issued by Frax Finance. On Aave V3 Arbitrum it carries $170.2K of supply across 116 wallets and $48.5K of debt across 130 wallets. Of that supply, only $717 across 3 wallets is enabled as collateral at the current 72% LT.
The active feed is a Chainlink FRAX/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, currently reporting a price of $0.99. Hardcoding the oracle to a fixed value removes the price manipulation vector for both the FRAX collateral and FRAX debt without materially repricing the position relative to its current accounting value.
Position concentration
Supply side: 116 wallets holding $170.2K, with the top five holding 100%. Of that, $717 across 3 wallets is enabled as collateral and $169.4K across 113 wallets is supplied without a collateral function. Debt side: 130 wallets holding $48.5K, with the top five holding 72%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 115 wallets, $169.4K of FRAX, including 2 that have FRAX enabled as collateral but carry no debt.
- Used as collateral backing debt: 1 wallet, $717 of FRAX, backing $482 of borrowing.
- Borrowed: 130 wallets, $48.5K of FRAX debt.
Borrower health
Across the 131 wallets that borrow FRAX or post it as collateral, the median HF is 2.19 and the 10th percentile is 1.14. 3 dust positions are below HF 1. 68 of the 131 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 FRAX borrowers post $389.2K of collateral, almost all of it WBTC at $339.8K. On the other side, the largest FRAX suppliers that borrow at all borrow native USDC against their position.
Source: LlamaRisk, July 28th, 2026
Recommendation
The reserve is frozen and its supply and borrow caps are reduced to one. The oracle is hardcoded at $1.00. Because slope2 only affects the borrow rate once utilization rises above the optimal point, raising it alone would leave the current 1.7% borrow APR at 29% utilization unchanged. The RF is therefore raised from 20% to 99%, redirecting almost all interest income from suppliers to the treasury. With their yield gone, suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is also raised to 5%, a moderate but immediate repayment incentive that applies at every utilization level, and slope2 to 100% so that once utilization does cross the optimal point the borrow rate climbs steeply. As this is the first step of the deprecation, sharper rate increases are deliberately left for a later round.
FRAX on Aave V3 Ethereum Core
FRAX is the dollar stablecoin issued by Frax Finance. On Aave V3 Ethereum Core it carries $38.4K of supply across 42 wallets and $28.7K of debt across 23 wallets. Of that supply, only $60 across 2 wallets is enabled as collateral at the current 72% LT.
The active feed is a Chainlink FRAX/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, currently reporting a price of $0.99. Hardcoding the oracle to a fixed value removes the price manipulation vector for both the FRAX collateral and FRAX debt without materially repricing the position relative to its current accounting value.
Position concentration
Supply side: 42 wallets holding $38.4K, with the top five holding 99%. Of that, $60 across 2 wallets is enabled as collateral and $38.3K across 40 wallets is supplied without a collateral function. Debt side: 23 wallets holding $28.7K, with the top five holding 100%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 41 wallets, $38.4K of FRAX, including 1 that has FRAX enabled as collateral but carries no debt.
- Used as collateral backing debt: 1 wallet, $12 of FRAX, backing $1 of borrowing.
- Borrowed: 23 wallets, $28.7K of FRAX debt.
Borrower health
Across the 24 wallets that borrow FRAX or post it as collateral, the median HF is 5.23 and the 10th percentile is 1.24. 17 of the 24 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 FRAX borrowers post $310.2K of collateral, roughly half of it WBTC at $149.7K, with similarly sized WETH and wstETH positions behind it. FRAX is borrowed against majors, not held directionally.
Source: LlamaRisk, July 28th, 2026
Recommendation
The reserve is frozen and its supply and borrow caps are reduced to one. The oracle is hardcoded at $1.00. Even at 74% utilization the variable borrow APR is only 4.5%, too low to give borrowers a reason to close their positions. The RF is therefore raised from 20% to 99%, redirecting almost all interest income from suppliers to the treasury. With their yield gone, suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is also raised to 5%, a moderate but immediate repayment incentive that applies at every utilization level, and slope2 to 100% so that once utilization crosses the optimal point the borrow rate climbs steeply. As this is the first step of the deprecation, sharper rate increases are deliberately left for a later round.
Aave V2 Reserves & Markets
Fifteen V2 reserves fall under this round of oracle deprecation. Seven on Ethereum carry material exposure and are analysed individually below: AMPL, FRAX, TUSD, USDP, RAI, sUSD and YFI. Together they hold $3.00M of supply and $2.77M of debt, of which $2.60M is AMPL debt already sitting below HF 1. $237.8K of the supplied balance is enabled as collateral, almost all of it TUSD at the live 65% LT and YFI at the residual 0.05% LT. The remaining 8 V2 reserves, six on Ethereum and two on Polygon, hold a further $33.7K of supply and $1.4K of debt and are handled with the simplified treatment described in the Negligible Exposure Reserves section.
AMPL on Aave V2 Ethereum
AMPL is Ampleforth’s rebasing, elastic-supply token. Its price feed is a Chainlink AMPL/ETH aggregator that prices the rebase-adjusted unit. On Aave V2 Ethereum it carries $1.66M of supply across 1004 wallets and $2.60M of debt across 34 wallets. None of the supplied balance is enabled as collateral, as the reserve LT is already zero. The reserve’s history is documented in the AMPL problem on Aave V2 Ethereum governance thread: a 2021 utilization spiral left the pool effectively fully in bad debt, partially settled through a later repayment, and the collateral side was previously addressed through a Merkl distribution to remaining suppliers. The treasury Collector itself holds 98% of the remaining supply.
Price dynamics
Current spot is $1.2792 and the trailing 6 month average is $1.1742. The recommended fixed price of $1.1742 is the trailing 6 month average, 8% below current spot. Fixing the asset below its current reported price will increase the health factor of the current borrow positions which are healthy, however, given that the reserve is already stressed (majority of the reserve being at the bad debt threshold), it will not result in meaningful changes or consequences to the overall health of the reserve.
Source: LlamaRisk, July 28th, 2026
Source: LlamaRisk, July 28th, 2026
Position concentration
Supply side: 1004 wallets holding $1.66M, with the top five holding 98%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 34 wallets holding $2.60M, with the top five holding 81%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 1004 wallets, $1.66M of AMPL.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied AMPL backs borrowing.
- Borrowed: 34 wallets, $2.60M of AMPL debt.
Borrower health
Across the 34 wallets that borrow AMPL, 30 (88%) are already below HF 1 and not recoverable through ordinary interest accrual or parameter changes. The remaining 4 sit at or above HF 1 with a median of 48.0.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 AMPL borrowers carry only a few dollars of combined collateral against their debt, so no meaningful cross-asset pattern exists. The debt is almost entirely unbacked, consistent with 88% of borrowers sitting below HF 1.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is fixed at $1.1742, the trailing 6 month average. No rate escalation is applied: utilization already sits at 99% with a variable borrow APR of roughly 317%, the RF is already 100%, and with 100% of the outstanding debt below HF 1 every additional point of interest only inflates the bad debt the protocol will eventually write off. Instead the IRM is flattened to base 0%, slope1 0%, and slope2 0% so the unrecoverable debt stops compounding.
FRAX on Aave V2 Ethereum
FRAX is the dollar stablecoin issued by Frax Finance. On Aave V2 Ethereum it carries $551.6K of supply across 126 wallets and a residual $4.5K of debt across 39 wallets. None of the supplied balance is enabled as collateral, as the reserve LT is already zero.
The active feed is a Chainlink FRAX/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, converted into ETH terms for the V2 oracle base, currently reporting a price of $0.99. Hardcoding the oracle to a fixed value removes the upward-manipulation vector for the residual FRAX debt without materially repricing the position relative to its current accounting value.
Position concentration
Supply side: 126 wallets holding $551.6K, with the top five holding 100%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 39 wallets holding $4.5K, with the top five holding 99%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 126 wallets, $551.6K of FRAX.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied FRAX backs borrowing.
- Borrowed: 39 wallets, $4.5K of FRAX debt.
Borrower health
Across the 39 wallets that borrow FRAX, the median HF is 1.21 and the 10th percentile is 0.00. 15 are already below HF 1. 1 more sits in the [1.0, 1.05] band where a 1% adverse move would tip it into liquidation. 13 of the 39 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The residual FRAX borrowing is small: the top 10 borrowers post $15.4K between them, nearly all of it WBTC. As flagged above, part of the dust positions are already at bad debt levels, however, the largest borrow positions are still adequately backed.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is hardcoded at $1.00. No IRM or RF change is needed: the base rate already sits at 20% and the RF is already at 99% from the prior deprecation round. Therefore, given that the residual $4.5K of debt is partially stressed, no further amplification of the borrow rates is needed.
TUSD on Aave V2 Ethereum
TUSD (TrueUSD) is a centrally issued, fiat-backed stablecoin. On Aave V2 Ethereum it carries $285.0K of supply across 308 wallets and $59.1K of debt across 69 wallets. Of that supply, $168.9K across 295 wallets is enabled as collateral at the current 65% LT.
The active feed is a Chainlink TUSD/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, converted into ETH terms for the V2 oracle base, currently reporting a price of $1.00. Hardcoding the oracle to a fixed value removes the price manipulation vector for both the TUSD collateral and TUSD debt without materially repricing the position relative to its current accounting value.
Position concentration
Supply side: 308 wallets holding $284.5K, with the top five holding 93%. Of that, $168.9K across 295 wallets is enabled as collateral and $115.7K across 13 wallets is supplied without a collateral function. Debt side: 69 wallets holding $59.1K, with the top five holding 90%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 275 wallets, $168.7K of TUSD, including 262 that have TUSD enabled as collateral but carry no debt.
- Used as collateral backing debt: 33 wallets, $115.8K of TUSD, backing $151.8K of borrowing.
- Borrowed: 69 wallets, $59.1K of TUSD debt.
Borrower health
Across the 97 wallets that borrow TUSD or post it as collateral, the median HF is 1.36 and the 10th percentile is 0.00. 28 are already below HF 1. 2 more sit in the [1.0, 1.05] band where a 1% adverse move would tip them into liquidation. 36 of the 97 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Value at risk (price decline)
33 wallets post TUSD as collateral ($115.8K) at its 65% LT. The sensitivity below counts, at each 5% step of a TUSD price decline, the wallets that newly cross below HF 1 and the collateral they carry. A 10% decline newly liquidates 1 wallet ($12 of collateral), a 20% decline 4 ($166), a 30% decline 5 ($166), and a 50% decline 7 ($734).
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 TUSD borrowers post $340.1K of collateral, mostly WBTC at $234.5K with WETH covering nearly all of the remainder. The largest TUSD suppliers that also borrow do so exclusively in WETH, around $29K between them. While the majority of borrows is healthy, some dust positions are at bad debt levels.
Source: LlamaRisk, July 28th, 2026
On the collateral side, the TUSD posted as collateral backing debt is concentrated in a single wallet: $114.0K of the $115.8K total, borrowing WETH against it at an HF of 2.54. The remaining 32 collateral positions are dust.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is hardcoded at $1.00. The RF is already 100%, but the variable borrow APR is only 1% at 20% utilization, so carrying the residual debt costs borrowers almost nothing. The IRM base is raised to 20%, in line with the other deprecated V2 reserves. This bumps up the incentives to repay the outstanding loans but does not materially impact the speed of bad debt accrual, so similarly to FRAX situation, is an acceptable middle-ground solution.
USDP on Aave V2 Ethereum
USDP (Pax Dollar) is a centrally issued, fiat-backed stablecoin from Paxos. On Aave V2 Ethereum it carries $201.3K of supply across 39 wallets and $50.4K of debt across 24 wallets, with the treasury Collector holding effectively the entire supply. None of the supplied balance is enabled as collateral, as the reserve LT is already zero.
The active feed is a Chainlink USDP/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, converted into ETH terms for the V2 oracle base, currently reporting a price of $1.00. Hardcoding the oracle to a fixed value removes the upward-manipulation vector for the residual USDP debt without materially repricing the position relative to its current accounting value.
Position concentration
Supply side: 39 wallets holding $201.3K, with the top five holding 100%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 24 wallets holding $50.4K, with the top five holding 99%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 39 wallets, $201.3K of USDP.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied USDP backs borrowing.
- Borrowed: 24 wallets, $50.4K of USDP debt.
Borrower health
Across the 24 wallets that borrow USDP, the median HF is 0.81 and 12 are already below HF 1, but those are dust positions holding only $1.6K of the $50.4K debt. The 12 wallets at or above HF 1 hold 97% of the debt with a median HF of 1.50.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 USDP borrowers post $89.5K of collateral, mostly WBTC at $79.2K with small stETH and USDC balances behind it. The residual USDP debt is borrowed against majors.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is hardcoded at $1.00. No IRM or RF change is needed: the borrow APR is already 20% at 25% utilization and the RF is already 100%, so holding the residual debt is already expensive and borrowers have every reason to repay it.
RAI on Aave V2 Ethereum
RAI is the floating-peg stablecoin from Reflexer, and its non-standard reference value sits well above $1 by design. The prior V2 deprecation ARFC recommended hardcoding the RAI oracle at $4, but that change was never executed and the reserve still prices from the live Chainlink RAI/ETH feed. Rather than reviving that reference value, this proposal treats RAI as a volatile asset: its market price has drifted too far from any defensible anchor to be handled like a stablecoin, so the oracle is fixed at the trailing 6 month average, as for the other volatile assets in scope. On Aave V2 Ethereum it carries $162.7K of supply across 65 wallets and $50.5K of debt across 7 wallets. None of the supplied balance is enabled as collateral, as the reserve LT is already zero.
Price dynamics
The active feed is a Chainlink RAI/ETH price feed. Trailing 6 month realised annualised volatility is 56.2%, maximum drawdown is 37.9%. The reported price ranged from $2.15 to $3.54 over the trailing six months, with the most recent reported value at $2.1692. The recommended fixed price of $2.7339 is the trailing 6 month average, 26% above current spot. Revaluing the outstanding RAI debt 26% above spot pushes one dust wallet below HF 1, while the dominant borrower, which holds nearly all of the $50.5K RAI debt, moves from HF 2.93 to roughly 2.32 and remains comfortably safe.
Source: LlamaRisk, July 28th, 2026
Source: LlamaRisk, July 28th, 2026
Position concentration
Supply side: 65 wallets holding $160.4K, with the top five holding 98%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 7 wallets holding $50.5K, with the top five holding 100%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 65 wallets, $160.4K of RAI.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied RAI backs borrowing.
- Borrowed: 7 wallets, $50.5K of RAI debt.
Borrower health
Across the 7 wallets that borrow RAI, the median HF is 2.93 and the 10th percentile is 1.49. 4 of the 7 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The 7 RAI borrowers post $170.6K of collateral, essentially all of it USDC posted as collateral by a single borrower. Borrowing a floating-peg stable against USDC is either a carry, short, or a directional bet on RAI.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is fixed at $2.7339, the trailing 6 month average. No IRM or RF change is needed: the borrow APR is already 20% at 31% utilization and the RF is already 100%. Fixing the price above the current price will not affect the health buffer of the largest position, however will move some insignificant dust positions to liquidation levels.
sUSD on Aave V2 Ethereum
sUSD is the Synthetix-issued stablecoin. SIP-423 retired the token and suspended transfers on Ethereum and Optimism, so sUSD held on Aave can no longer be withdrawn by suppliers, repaid by borrowers or seized in a liquidation. On Aave V2 Ethereum it carries $68.8K of supply across 374 wallets and $13.3K of debt across 73 wallets, with the treasury Collector holding 67% of the supply. None of the supplied balance is enabled as collateral, as the reserve LT is already zero. Because the token cannot move, the oracle is fixed at its current market value, freezing the reserve’s accounting without assigning value changes to positions that cannot act.
The active feed is a Chainlink sUSD/USD secondary market price feed used in a stable price cap adapter with a $1.04 price cap, converted into ETH terms for the V2 oracle base. The most recent reported value is $0.2952, 70% below the nominal $1 peg. The adapter exposes only the live value and no round history, so a trailing average cannot be computed for this feed. The recommended fixed price of $0.2952 therefore freezes the oracle at its current reported value, removing the manipulation surface without repricing any position.
Position concentration
Supply side: 374 wallets holding $68.8K, with the top five holding 91%. None of it is enabled as collateral, so the whole balance is supply that backs no borrowing. Debt side: 73 wallets holding $13.2K, with the top five holding 90%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 374 wallets, $68.8K of sUSD.
- Used as collateral backing debt: none. The reserve LT is zero, so no supplied sUSD backs borrowing.
- Borrowed: 73 wallets, $13.2K of sUSD debt.
Borrower health
Across the 73 wallets that borrow sUSD, the median HF is 2.98 and the 10th percentile is 0.00. 16 are already below HF 1. Because repayment is impossible while transfers are suspended, the outstanding debt is effectively unrecoverable regardless of the reported HFs.
Source: LlamaRisk, July 28th, 2026
Co-position patterns
The top 10 sUSD borrowers post $58.9K of collateral, mostly WETH at $50.2K with small LINK and DAI balances behind it. The residual sUSD debt is borrowed against majors. Part of the debt is already stressed, with 3 of the top 10 positions being at bad debt levels.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is fixed at $0.2952, its current reported value. Since the frozen collateral can never be realized and the debt can never be repaid, an alternative would be repricing the oracle to zero, which removes the unrealizable value from HF calculations entirely. We instead fix the price at the current reported value, which removes the manipulation surface while keeping the remaining balances at market value rather than writing them off. With transfers frozen under SIP-423, borrowers cannot repay and suppliers cannot withdraw, so any interest that accrues is pure paper bad debt. The IRM is therefore flattened to zero, base 0%, slope1 0% and slope2 0%, mirroring the AMPL treatment, so the unrecoverable debt stops compounding.
YFI on Aave V2 Ethereum
YFI is the governance token of Yearn Finance and was deprecation-flagged in one of the previous rounds. On Aave V2 Ethereum it carries $69.2K of supply across 662 wallets and a residual $45 of debt across 31 wallets. Of that supply, $68.9K across 641 wallets is enabled as collateral at the current 0.05% LT, so the residual collateral function is already negligible.
Price dynamics
The active feed is a Chainlink YFI/ETH price feed. Trailing 6 month realised annualised volatility is 74.8%, maximum drawdown is 34.0%. Current spot is $1,998.9956 and the trailing 6 month average is $2,396.8163. The recommended fixed price of $2,396.8163 is the trailing 6 month average, 20% above current spot.
Source: LlamaRisk, July 28th, 2026
Source: LlamaRisk, July 28th, 2026
Position concentration
Supply side: 662 wallets holding $69.2K, with the top five holding 77%. Of that, $68.9K across 641 wallets is enabled as collateral and $339 across 21 wallets is supplied without a collateral function. Debt side: 31 wallets holding $45, with the top five holding 70%.
Source: LlamaRisk, July 28th, 2026
Position breakdown
- Supplied only (not borrowed against): 606 wallets, $64.1K of YFI, including 585 that have YFI enabled as collateral but carry no debt.
- Used as collateral backing debt: 56 wallets, $5.1K of YFI, backing $12.1K of borrowing.
- Borrowed: 31 wallets, $45 of YFI debt.
Borrower health
Across the 86 wallets that borrow YFI or post it as collateral, the median HF is 2.45 and the 10th percentile is 1.03. 6 are already below HF 1. 4 more sit in the [1.0, 1.05] band where a 1% adverse move would tip them into liquidation. 46 of the 86 sit above HF 2.
Source: LlamaRisk, July 28th, 2026
Recommendation
The oracle is fixed at $2,396.8163, the trailing 6 month average. No changes are made to the IRM, as the reserve is partially stressed, so bad debt accrual should not speed up.
Aggregate IRM and RF Recommendation
IRM and RF changes are evaluated reserve by reserve against three conditions: current utilization, the current borrow rate, and the health of the outstanding debt. Where utilization already sits near 100% and the borrow rate is significant, no change is needed, because the existing configuration already makes the residual debt expensive to hold. Where utilization is low, raising slope2 alone would change nothing, because slope2 only enters the borrow rate once utilization rises above the optimal point.
For those reserves the first change is to the RF: raising it to 99% redirects almost all interest income from suppliers to the treasury, and with their yield gone suppliers are expected to withdraw, which lifts utilization and with it the borrow rate. The IRM base rate is raised to 5% alongside, giving borrowers a steady repayment incentive at any utilization without forcing immediate liquidations, and slope2 to 100% so that once utilization does cross the optimal point the borrow rate climbs steeply. Sharper increases are deliberately deferred to a later round of the deprecation.
Finally, where the outstanding debt sits predominantly with wallets already below HF 1, or cannot be repaid at all, rate increases are avoided altogether, because interest accrual on unrecoverable positions only inflates the bad debt the protocol will eventually write off. Across this set that applies to AMPL on Aave V2 and to the transfer-frozen sUSD reserves on Aave V2 Ethereum and Aave V3 Optimism, all of which have their IRM flattened to zero.
| Asset | Instance | Utilization | Borrow APR | Current RF | Debt below HF 1 | Action |
|---|---|---|---|---|---|---|
| LUSD | Aave V3 Ethereum Core | 33% | 2.1% | 20% | 0% | RF to 99%, base to 5%, slope2 to 100% |
| USDm | Aave V3 Celo | 90% | 4.0% | 15% | 0% | RF to 99%, base to 5%, slope2 to 100% |
| RPL | Aave V3 Ethereum Core | 35% | 3.7% | 20% | 0% | RF to 99%, base to 5%, slope2 to 100% |
| LUSD | Aave V3 Arbitrum | 39% | 5.2% | 50% | 0% | RF to 99%, base to 5%, slope2 to 100% |
| FRAX | Aave V3 Arbitrum | 29% | 1.7% | 20% | 0% | RF to 99%, base to 5%, slope2 to 100% |
| FRAX | Aave V3 Ethereum Core | 74% | 4.5% | 20% | 0% | RF to 99%, base to 5%, slope2 to 100% |
| AMPL | Aave V2 Ethereum | 99% | 317% | 100% | 100% | flatten IRM to zero |
| FRAX | Aave V2 Ethereum | 1% | 20% | 100% | 4% | no change |
| TUSD | Aave V2 Ethereum | 20% | 1.0% | 100% | 9% | base to 20% |
| USDP | Aave V2 Ethereum | 25% | 20% | 100% | 3% | no change |
| RAI | Aave V2 Ethereum | 31% | 20% | 100% | 0% | no change |
| sUSD | Aave V2 Ethereum | 100% | 20% | 100% | 6% | flatten IRM to zero |
| YFI | Aave V2 Ethereum | 0% | 20% | 100% | n/a ($45 debt) | no change |
Source: LlamaRisk, July 28th, 2026
Stressed-Dominant Reserves
AMPL on Aave V2 Ethereum holds $2.60M of outstanding debt of which $2.60M (100.0%) sits with borrowers whose protocol-reported HF is below one. sUSD on Aave V2 Ethereum is a second effectively-stressed case: its debt is shown as predominantly healthy by reported HF, but with transfers frozen the full $13.3K is unrecoverable. Rate escalation is deliberately avoided here: at 99% utilization the current IRM already accrues at roughly 317% APR onto debt that will not be repaid, so every block compounds the eventual write-off. The IRM is instead flattened to base 0%, slope1 0%, and slope2 0%, freezing the unrecoverable debt at its current level while the fixed oracle caps its accounting value.
Treasury Holdings
The Aave treasury Collector, largely through accumulated RF income, is itself a major supplier of several reserves in scope. It holds 100% of the USDP supply ($200.5K, of which $151.0K is withdrawable at current liquidity), 98% of AMPL ($1.62M, effectively none withdrawable at 99% utilization), 40% of TUSD ($115.3K, all withdrawable), 67% of sUSD ($45.8K, not withdrawable while transfers are frozen), 73% of MAI on Avalanche ($15.0K) and 87% of miMATIC on Polygon ($7.8K). Withdrawing the withdrawable balances as part of the wind-down recovers value for the DAO and drains the affected reserves faster. The same housekeeping applies to legacy treasury positions outside this scope, such as GUSD on Aave V2 Ethereum.
Negligible Exposure Reserves
The reserves below each carry less than $50K of combined supply and debt. They were analysed with the same methodology as the material reserves above, but given the small exposure the full per-asset figures are omitted for conciseness and consolidated into the table below. The remedy is the same: the oracle is replaced with a fixed-price adapter, which freezes each position’s accounting value and removes the manipulation surface of the thinly traded feed. Stablecoins still trading within 3% of their dollar peg (LUSD, FRAX and MAI/miMATIC) are hardcoded at $1.00, matching the treatment of the material stablecoin reserves. Significantly depegged stablecoins are instead fixed at their current price, so the switch to the fixed adapter reprices nothing: sUSD on Optimism, trading far below its peg and non-transferable under SIP-423, is set at its live reported value of $0.2763. With the token frozen, the reserve, where the treasury Collector holds 56% of the supply, can no longer be exited and the fixed price simply freezes its accounting. For the same reason its IRM is flattened to zero rather than moved to the standard base 20% and slope2 40%: accrual on non-repayable debt only inflates the eventual write-off. The volatile assets are fixed at the trailing 6 month average of the existing feed with no premium or discount. The IRM is set to a 20% base rate with slope2 reduced to 40%, so every residual borrow position pays a meaningful rate even at low utilization, encouraging repayment, while the flattened slope2 prevents runaway interest accrual on positions that are never closed. The same treatment was previously applied when sunsetting the DPI reserve on Aave V2.
The table below breaks each reserve’s exposure into the same three categories used in the per-asset sections, alongside the current oracle price and the recommended fixed price. The split is computed from per-wallet balances, collateral flags and account debt read on-chain for every holder of the corresponding aToken and debt token.
| Asset | Instance | Supplied only | Used as collateral backing debt | Borrowed | Current Price | Fixed Price |
|---|---|---|---|---|---|---|
| BAL | Aave V2 Ethereum | $6,252 | $133 | $11 | $0.1153 | $0.1424 |
| ENJ | Aave V2 Ethereum | $2,543 | $981 | $97 | $0.0254 | $0.0372 |
| KNC | Aave V2 Ethereum | $2,765 | $244 | $853 | $0.1074 | $0.1356 |
| LUSD | Aave V2 Ethereum | $5,233 | $0 | $225 | $1.0050 | $1.0000 |
| REN | Aave V2 Ethereum | $406 | $102 | $20 | $0.0033 | $0.0033 |
| ZRX | Aave V2 Ethereum | $9,443 | $1,174 | $113 | $0.0801 | $0.0966 |
| BAL | Aave V2 Polygon | $11 | $5 | $24 | $0.1151 | $0.1405 |
| GHST | Aave V2 Polygon | $8 | $3,615 | $0 | $0.0441 | $0.0867 |
| MAI | Aave V3 Arbitrum | $15,240 | $0 | $13 | $0.9731 | $1.0000 |
| FRAX | Aave V3 Avalanche | $6,584 | $224 | $6,174 | $0.9926 | $1.0000 |
| MAI | Aave V3 Avalanche | $20,294 | $154 | $4,319 | $0.9730 | $1.0000 |
| FXS | Aave V3 Ethereum Core | $119 | $0 | $1 | $0.2545 | $0.5415 |
| KNC | Aave V3 Ethereum Core | $6,180 | $0 | $1,149 | $0.1064 | $0.1472 |
| STG | Aave V3 Ethereum Core | $60 | $0 | $1 | $0.1256 | $0.2666 |
| FRAX | Aave V3 Ethereum EtherFi | $14,970 | $0 | $253 | $0.9923 | $1.0000 |
| LUSD | Aave V3 Optimism | $25,863 | $0 | $17,955 | $1.0048 | $1.0000 |
| MAI | Aave V3 Optimism | $8,396 | $0 | $2,587 | $0.9733 | $1.0000 |
| sUSD | Aave V3 Optimism | $21,481 | $4,395 | $11,770 | $0.2763 | $0.2763 |
| SCR | Aave V3 Scroll | $11,404 | $0 | $43 | $0.0198 | $0.0418 |
The collateral-backing amounts for GHST on Aave V2 Polygon and the other V2 dust reserves sit behind LTs of 0.05% or lower, so their effective borrowing power is negligible even where the wallets have the asset enabled as collateral. The largest genuine collateral use in the set is sUSD on Aave V3 Optimism, where $4,395 backs debt at the reserve’s 70% LT, though with sUSD transfers frozen that collateral cannot be seized in practice.
Specification
Freeze and Caps
Aave V3
| Asset | Instance | Freeze | Current Supply Cap | New Supply Cap | Current Borrow Cap | New Borrow Cap |
|---|---|---|---|---|---|---|
| FRAX | Aave V3 Arbitrum | freeze | 1 | 1 | 1 | 1 |
| LUSD | Aave V3 Arbitrum | freeze | 1 | 1 | 1 | 1 |
| MAI | Aave V3 Arbitrum | already frozen | 325,000 | 1 | 250,000 | 1 |
| FRAX | Aave V3 Avalanche | freeze | 1 | 1 | 1 | 1 |
| MAI | Aave V3 Avalanche | already frozen | 20,000 | 1 | 10,000 | 1 |
| USDm | Aave V3 Celo | freeze | 1,100,000 | 1 | 990,000 | 1 |
| BAL | Aave V3 Ethereum Core | freeze | 1 | 1 | 1 | 1 |
| FRAX | Aave V3 Ethereum Core | freeze | 1 | 1 | 1 | 1 |
| FXS | Aave V3 Ethereum Core | already frozen | 1,200,000 | 1 | 330,000 | 1 |
| KNC | Aave V3 Ethereum Core | already frozen | 1,200,000 | 1 | 350,000 | 1 |
| LUSD | Aave V3 Ethereum Core | freeze | 5,000,000 | 1 | 1 | 1 |
| RPL | Aave V3 Ethereum Core | freeze | 550,000 | 1 | 1 | 1 |
| STG | Aave V3 Ethereum Core | already frozen | 10,000,000 | 1 | 3,200,000 | 1 |
| FRAX | Aave V3 Ethereum EtherFi | freeze | 1 | 1 | 1 | 1 |
| LUSD | Aave V3 Optimism | freeze | 1 | 1 | 1 | 1 |
| MAI | Aave V3 Optimism | already frozen | 650,000 | 1 | 525,000 | 1 |
| sUSD | Aave V3 Optimism | freeze | 1 | 1 | 1 | 1 |
| BAL | Aave V3 Polygon | already frozen | 361,000 | 1 | 290,000 | 1 |
| GHST | Aave V3 Polygon | freeze | 1 | 1 | 1 | 1 |
| miMATIC | Aave V3 Polygon | already frozen | 900,000 | 1 | 700,000 | 1 |
SCR on Aave V3 Scroll is omitted from this table: it is already frozen with both caps at 1, so only its oracle and IRM change.
Stablecoin Oracle Adjustment
Aave V3
| Asset | Instance | Current Price | Recommended Fixed Price |
|---|---|---|---|
| LUSD | Aave V3 Ethereum Core | $1.00 | $1.00 |
| USDm | Aave V3 Celo | $1.00 | $1.00 |
| LUSD | Aave V3 Arbitrum | $1.01 | $1.00 |
| FRAX | Aave V3 Arbitrum | $0.99 | $1.00 |
| FRAX | Aave V3 Ethereum Core | $0.99 | $1.00 |
Aave V2
The V2 hardcodes are encoded in ETH terms for the V2 oracle base: the fixed USD value is divided by the live ETH/USD price inside the adapter.
| Asset | Instance | Current Price | Recommended Fixed Price |
|---|---|---|---|
| FRAX | Aave V2 Ethereum | $0.99 | $1.00 |
| LUSD | Aave V2 Ethereum | $1.01 | $1.00 |
| TUSD | Aave V2 Ethereum | $1.00 | $1.00 |
| USDP | Aave V2 Ethereum | $1.00 | $1.00 |
Volatile Asset Oracle Adjustment
Aave V3
| Asset | Instance | Current Price | Recommended Fixed Price | Denomination |
|---|---|---|---|---|
| RPL | Aave V3 Ethereum Core | $1.6104 | $1.9543 | USD |
Aave V2
| Asset | Instance | Current Price | Recommended Fixed Price | Denomination |
|---|---|---|---|---|
| AMPL | Aave V2 Ethereum | $1.2792 | $1.1742 | ETH |
| RAI | Aave V2 Ethereum | $2.1692 | $2.7339 | ETH |
| sUSD | Aave V2 Ethereum | $0.2952 | $0.2952 | ETH |
| YFI | Aave V2 Ethereum | $1,998.9956 | $2,396.8163 | ETH |
Negligible Exposure Oracle Adjustment
Volatile assets are fixed at the trailing 6 month average of the existing feed. Stablecoins still trading within 3% of their peg are hardcoded at $1.00, and significantly depegged stablecoins are fixed at their current price.
Aave V3
| Asset | Instance | Current Price | Recommended Fixed Price |
|---|---|---|---|
| MAI | Aave V3 Arbitrum | $0.9731 | $1.0000 |
| FRAX | Aave V3 Avalanche | $0.9926 | $1.0000 |
| MAI | Aave V3 Avalanche | $0.9730 | $1.0000 |
| FXS | Aave V3 Ethereum Core | $0.2545 | $0.5415 |
| KNC | Aave V3 Ethereum Core | $0.1064 | $0.1472 |
| STG | Aave V3 Ethereum Core | $0.1256 | $0.2666 |
| FRAX | Aave V3 Ethereum EtherFi | $0.9923 | $1.0000 |
| LUSD | Aave V3 Optimism | $1.0048 | $1.0000 |
| MAI | Aave V3 Optimism | $0.9733 | $1.0000 |
| sUSD | Aave V3 Optimism | $0.2763 | $0.2763 |
| SCR | Aave V3 Scroll | $0.0198 | $0.0418 |
Aave V2
| Asset | Instance | Current Price | Recommended Fixed Price | Denomination |
|---|---|---|---|---|
| BAL | Aave V2 Ethereum | $0.1153 | $0.1424 | ETH |
| ENJ | Aave V2 Ethereum | $0.0254 | $0.0372 | ETH |
| KNC | Aave V2 Ethereum | $0.1074 | $0.1356 | ETH |
| REN | Aave V2 Ethereum | $0.0033 | $0.0033 | ETH |
| ZRX | Aave V2 Ethereum | $0.0801 | $0.0966 | ETH |
| BAL | Aave V2 Polygon | $0.1151 | $0.1405 | ETH |
| GHST | Aave V2 Polygon | $0.0441 | $0.0867 | ETH |
Reserve Factor Adjustment
Applied to the reserves where the current borrow rate is too low to encourage repayment (see the Aggregate IRM and RF Recommendation). All other reserves in scope already carry an RF of 100% and are unchanged.
Aave V3
| Asset | Instance | Current RF | New RF |
|---|---|---|---|
| LUSD | Aave V3 Ethereum Core | 20% | 99% |
| FRAX | Aave V3 Ethereum Core | 20% | 99% |
| RPL | Aave V3 Ethereum Core | 20% | 99% |
| LUSD | Aave V3 Arbitrum | 50% | 99% |
| FRAX | Aave V3 Arbitrum | 20% | 99% |
| USDm | Aave V3 Celo | 15% | 99% |
Interest Rate Model Adjustment
Aave V3
| Asset | Instance | Base (current / new) | Slope1 (current / new) | Slope2 (current / new) |
|---|---|---|---|---|
| FRAX | Aave V3 Arbitrum | 0% / 5% | 5.5% / 5.5% | 40% / 100% |
| LUSD | Aave V3 Arbitrum | 2% / 5% | 6.5% / 6.5% | 50% / 100% |
| USDm | Aave V3 Celo | 0% / 5% | 4% / 4% | 75% / 100% |
| FRAX | Aave V3 Ethereum Core | 0% / 5% | 5.5% / 5.5% | 40% / 100% |
| LUSD | Aave V3 Ethereum Core | 0% / 5% | 5% / 5% | 50% / 100% |
| RPL | Aave V3 Ethereum Core | 0% / 5% | 8.5% / 8.5% | 87% / 100% |
| MAI | Aave V3 Arbitrum | 0% / 20% | 9% / 9% | 300% / 40% |
| FRAX | Aave V3 Avalanche | 0% / 20% | 5.5% / 5.5% | 40% / 40% |
| MAI | Aave V3 Avalanche | 0% / 20% | 9% / 9% | 300% / 40% |
| BAL | Aave V3 Ethereum Core | 5% / 20% | 15% / 15% | 150% / 40% |
| FXS | Aave V3 Ethereum Core | 0% / 20% | 9% / 9% | 300% / 40% |
| KNC | Aave V3 Ethereum Core | 0% / 20% | 9% / 9% | 300% / 40% |
| STG | Aave V3 Ethereum Core | 0% / 20% | 7% / 7% | 300% / 40% |
| FRAX | Aave V3 Ethereum EtherFi | 0% / 20% | 5.5% / 5.5% | 40% / 40% |
| LUSD | Aave V3 Optimism | 2% / 20% | 5.5% / 5.5% | 50% / 40% |
| MAI | Aave V3 Optimism | 0% / 20% | 5.5% / 5.5% | 300% / 40% |
| sUSD | Aave V3 Optimism | 0% / 0% | 5.5% / 0% | 50% / 0% |
| BAL | Aave V3 Polygon | 5% / 20% | 15% / 15% | 150% / 40% |
| GHST | Aave V3 Polygon | 0% / 20% | 7% / 7% | 300% / 40% |
| miMATIC | Aave V3 Polygon | 0% / 20% | 9% / 9% | 300% / 40% |
| SCR | Aave V3 Scroll | 0% / 20% | 7% / 7% | 300% / 40% |
Aave V2
| Asset | Instance | Base (current / new) | Slope2 (current / new) |
|---|---|---|---|
| AMPL | Aave V2 Ethereum | 20% / 0% | 300% / 0% |
| TUSD | Aave V2 Ethereum | 1% / 20% | 0% / 0% |
| BAL | Aave V2 Ethereum | 20% / 20% | 300% / 40% |
| ENJ | Aave V2 Ethereum | 20% / 20% | 300% / 40% |
| sUSD | Aave V2 Ethereum | 20% / 0% | 300% / 0% |
| KNC | Aave V2 Ethereum | 20% / 20% | 300% / 40% |
| LUSD | Aave V2 Ethereum | 20% / 20% | 300% / 40% |
| REN | Aave V2 Ethereum | 20% / 20% | 300% / 40% |
| ZRX | Aave V2 Ethereum | 1% / 20% | 0% / 40% |
| BAL | Aave V2 Polygon | 20% / 20% | 300% / 40% |
| GHST | Aave V2 Polygon | 20% / 20% | 300% / 40% |
Reserves receiving no IRM change (FRAX, USDP, RAI and YFI on Aave V2 Ethereum) are omitted: their rates and RF already make the residual debt expensive to hold, as covered in the per-asset sections.
Next Steps
For Aave V2 the measures in this proposal are terminal. Given the minimal remaining exposure and the deprecated nature of Aave V2, the fixed oracles, 100% RFs and existing rate configurations are not intended to be revisited. For the V3 reserves this is the first step of the deprecation, deliberately calibrated to avoid forcing borrowers into immediate liquidation: the RF moves to 99%, the IRM base rate to 5% and slope2 to 100%. A later round only needs to adjust the IRM further where borrowers have not responded, or reprice a fixed oracle in the unlikely case that market conditions move materially against it.
Disclaimer
This review was independently prepared by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.