# Binance Hot Wallet Exploit: Aave's Response **URL:** \ **Category:** Risk\ **Created:** [October 30, 2026, 12:59am UTC](https://governance.aave.com/t/binance-hot-wallet-exploit-aaves-response/25954 "2026-10-30T00:59:32Z")\ **Posts on this page:** 1\ **Showing post:** 18
**Author:** ![LlamaRisk](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/llamarisk/32/12865_2.png) [@LlamaRisk](https://governance.aave.com/u/LlamaRisk)\ **Post date:** [October 30, 2026, 1:51pm UTC](https://governance.aave.com/t/binance-hot-wallet-exploit-aaves-response/25954/18 "2026-10-30T13:51:35Z")
_Update, 13:49 UTC, 30 October 2026._ ## Risk Steward actions While the markets were frozen, we executed two Risk Steward batches across Aave V3 and Aave V4. The first batch [lowered Slope2](https://governance.aave.com/t/risk-stewards-temporary-slope2-reductions-on-aave-v3-and-aave-v4-2026-10-30/25955) on the largest stablecoin reserves, and on WETH on the Aave V4 Ethereum Core Hub, so that the borrow rate at full utilization does not exceed 10.00% APR. Supplier withdrawals during the freeze pushed these reserves to between 92% and 100% utilization. With new supply blocked, a high rate could not attract deposits and only added to borrower debt, therefore, these actions were executed to lower the interest rate pressure on the borrowers. These changes are temporary, and we will review the previous Slope2 settings once markets are back to normal. The second batch [reduced borrow caps and draw caps](https://governance.aave.com/t/risk-stewards-borrow-and-draw-cap-reductions-on-aave-v3-and-aave-v4-2026-10-30/25960) on the largest borrow paths to about 2% above the amount borrowed just before the exploit. This removes about $3.7B of unused borrow capacity on Aave V3 and $130M on Aave V4, which would otherwise have become available all at once when markets reopen. Every reserve can still return to its pre-exploit borrow size. The GHO borrow cap reductions on Aave V3 Core and Prime were queued with the GHO Stewards. ## How the unfreeze proceeds Together with Aave Labs and the other Aave service providers, we defined the market freeze rollback plan. The guardians will execute this plan in four waves. 1. All Aave V3 reserves frozen during the incident are unfrozen, with LTV kept at 0 for now. 2. On Aave V4, each keep-list reserve below receives a new collateral configuration with a collateral factor of 0, which applies to every new borrow against it. This wave has already been executed. 3. LTV is restored on Aave V3 for the majority of the reserves. 4. Aave V4 reserves are unfrozen. The keep-list reserves keep the collateral factor 0 configuration from the second wave, so after the unfreeze they still cannot back new borrows on Aave V4. USDT, USDC, USDT0, POL, WAVAX, sAVAX, XAUt, PAXG and OP, including their bridged and wrapped versions, stay at LTV 0 on Aave V3 and at a collateral factor of 0 on Aave V4, on every market where they are listed. On Aave V3 this also applies to E-Mode. These are the assets held across the [exploiter’s address cluster](https://arkm.com/explorer/entity/21a94755-f604-45e5-9501-6542e23005e8). LTV 0 on Aave V3 and a collateral factor of 0 on Aave V4 only stop these assets from adding new borrowing power when used as collateral. Supplying, withdrawing, borrowing and repaying them works as normal. On Aave V3, existing positions that use them as collateral keep their liquidation thresholds, so health factors do not change. On Aave V4, existing positions stay on their current collateral configuration until a new borrow, a collateral withdrawal or a collateral toggle moves them to the configuration with a collateral factor of 0. ## Next steps We will evaluate the conditions under which LTV can be restored for the keep-list assets and share them in this thread. We continue to monitor the exploiter’s wallets, the reserves affected by the freeze and the Chainlink price feeds that Aave relies on. --- _[View the full topic](https://governance.aave.com/t/binance-hot-wallet-exploit-aaves-response/25954)._