LlamaRisk supports this change. Only ≈19% (169k/900k ETH) of the ETH supply cap is filled on the Prime instance. With LTV set to 0%, borrowing against ETH was disabled outside E-mode. As a result, all borrowing activity has been driven solely by ETH-correlated E-mode (93.5% max LTV and wstETH as collateral).
ETH parameter comparison, Core vs Prime Instance:
| Instance | Max LTV | LT | LP | uOptimal | Slope1 | Slope2 | Liq. Fee | Reserve factor |
|---|---|---|---|---|---|---|---|---|
| Prime | 0%→82% | 83% | 5% | 90% | 2.8% | 85% | 10% | 10% |
| Core | 80.5% | 83% | 5% | 90% | 2.7% | 80% | 10% | 15% |
ETH’s borrow rates on Prime are higher due to steeper Slope1 and Slope2 parameters, and the new LTV (82%) exceeds Core markets (80.5%). With borrow demand primarily driven by LRT looping, E-modes dominate total borrowing on Prime.
Collateral to Borrow mapping on Aave V3 Prime. Source: LlamaRisk, February 5th, 2025.
Restoring ETH’s LTV to 82% will enable borrowing outside E-mode, with the primary use case foreseen as borrowing stables.
Disclaimer
This review was independently prepared by LlamaRisk, a community-led non-profit decentralized organization 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.