title: [Direct-to-AIP] Reserve Factor Updates Across Aave V3 and V2 Markets
author: @TokenLogic
created: 2026-10-27
Summary
This publication proposes Reserve Factor updates on 54 reserves across 12 Aave V3 instances and the Aave V2 Ethereum market. At balances and rates as of 9 November 2026, the changes add about $3.5M of annualised revenue to the DAO and raise the blended RF from 12.0% to 12.7%. The proposal is part of the ongoing effort to streamline Aave V3.
Motivation
Overview
Over the past months, the DAO has been streamlining Aave V3. Low-adoption reserves and instances have been wound down, Aave V2 has been frozen, and ongoing work aims to focus Ethereum Core on liquid, bluechip collateral, with assets that carry additional risk moving to Aave V4, where that risk can be priced. This proposal applies the same direction to the protocol’s revenue side.
Every borrowable reserve exposes the DAO to collateral, oracle and liquidation risk. The RF compensates the DAO for carrying that risk. On many reserves today, the DAO keeps a small share of the interest on positions whose tail risk it fully underwrites. Raising the RF improves the DAO’s return for the same risk, without changing the rate any borrower pays. On legacy markets, it also lowers the incentive to keep liquidity where activity is being wound down.
TokenLogic has reviewed the RF of every borrowable reserve across Aave V3 and V2. Reserves not listed in the Specification keep their current RF. The RF decides how the interest paid by borrowers is split between suppliers and the DAO; it does not change the rate a borrower pays. Its effect therefore depends on who the reserve’s users are:
- On stablecoins, suppliers choose a venue on supply APY, so the RF is a competitive parameter first. On V3, stablecoin RFs in this proposal stay at or below 70%, except for DAI.e on Avalanche, and most move by 5 to 15 percentage points.
- On assets with very low utilisation (BTC wrappers, LSTs and LRTs), the supply APY is already ~0.00%, and most debt is in old positions, with several on reserves where borrowing is already disabled. Raising the RF there costs suppliers at most 1-2 bps.
- On markets in decline, or where users have a better Aave alternative on the same chain, a higher RF directs activity to the markets the DAO wants to grow.
The changes below are grouped by rationale. Revenue figures are annualised at borrow balances and rates as of 9 November 2026. Ethereum Core WETH is not included, so that its parameters can be coordinated with the ongoing work on Ethereum Core collateral.
Rationale: Assets with no Supply Yield (to 100%)
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Ethereum Core |
WBTC |
50% |
100% |
$51,959,854 |
0 |
$81,503 |
| Ethereum Core |
cbBTC |
50% |
100% |
$9,318,184 |
0 |
$13,293 |
| Ethereum Core |
wstETH |
35% |
100% |
$30,915,857 |
0 |
$3,766 |
| Ethereum Core |
weETH |
45% |
100% |
$114,545 |
0 |
$634 |
| Ethereum Core |
tBTC |
50% |
100% |
$186,835 |
0 |
$241 |
| Ethereum Core |
FBTC |
75% |
100% |
$75,236 |
0 |
$105 |
| Ethereum Core |
cbETH |
15% |
100% |
$38,534 |
0 |
$22 |
| Ethereum Core |
rETH |
15% |
100% |
$101,549 |
0 |
$16 |
| Base |
cbBTC |
50% |
100% |
$6,521,841 |
-1 |
$20,839 |
| Base |
cbETH |
15% |
100% |
$75,043 |
0 |
$5 |
| Base |
wstETH |
5% |
100% |
$250,876 |
0 |
$16 |
| Base |
weETH |
45% |
100% |
$6,220 |
0 |
$35 |
| Arbitrum |
WBTC |
50% |
100% |
$10,011,686 |
-2 |
$35,812 |
| Arbitrum |
weETH |
45% |
100% |
$4,384 |
0 |
$24 |
| Avalanche |
BTC.b |
50% |
100% |
$2,219,268 |
0 |
$1,413 |
| Avalanche |
WBTC.e |
50% |
100% |
$135,636 |
-2 |
$606 |
| Polygon |
WBTC |
50% |
100% |
$2,011,555 |
-1 |
$6,555 |
| Polygon |
wstETH |
5% |
100% |
$15,880 |
0 |
$40 |
| BNB Chain |
BTCB |
20% |
100% |
$904,465 |
-1 |
$4,897 |
| Optimism |
WBTC |
50% |
100% |
$790,494 |
-2 |
$3,159 |
| Optimism |
wstETH |
5% |
100% |
$83,828 |
0 |
$229 |
| X Layer |
xBTC |
10% |
100% |
$2,765 |
0 |
$0 |
These reserves combine utilisation of a few percent with a supply APY that rounds to zero. Borrowing here is incidental (for example, a temporary hedge when the WETH borrow rate spikes), and no supplier is pricing in the yield. Setting the RF to 100% routes the full interest to the DAO with no effect on borrowers. Combined impact: +$173,209/yr.
Rationale: Volatile Tokens (to 50%)
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Ethereum Core |
LINK |
20% |
50% |
$4,430,215 |
-1 |
$11,291 |
| Arbitrum |
ARB |
20% |
50% |
$291,148 |
-3 |
$1,107 |
| Arbitrum |
LINK |
20% |
50% |
$71,259 |
0 |
$71 |
| Polygon |
WPOL |
20% |
50% |
$1,516,280 |
-25 |
$10,786 |
| Gnosis |
GNO |
20% |
50% |
$351,657 |
-1 |
$1,000 |
LINK, ARB, WPOL, and GNO suppliers do not supply for yield, which is under 10 bps on LINK, ARB, and GNO and about 0.7% on WPOL. We propose 50% on all four. Combined impact: +$24,255/yr.
Rationale: USDe on Plasma
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Plasma |
USDe |
25% |
35% |
$29,975,577 |
-4 |
$217,872 |
USDe borrow demand on Plasma is low (about 6% utilisation), and the USDe borrow rate currently sits above the sUSDe staking yield. The supply APY moves by 4 bps. Impact: +$217,872/yr.
Rationale: Plasma USDT0 and GHO
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Plasma |
USDT0 |
5% |
7.5% |
$632,468,070 |
-16 |
$1,036,635 |
| Plasma |
GHO |
5% |
10% |
$18,382,445 |
-20 |
$42,678 |
- USDT0: the RF moves from 5% to 7.5%, in line with the terms agreed with the Plasma team. This line will only be included in the AIP once those terms are finalised.
- GHO: GHO on Plasma is supplied by users, and the DAO co-funds the incentives on this market. A 10% RF aligns it with GHO on Monad and Base.
Combined impact: +$1,079,313/yr.
Rationale: Ethereum Core DAI
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Ethereum Core |
DAI |
25% |
30% |
$99,817,583 |
-17 |
$217,486 |
Ethereum Core DAI has about $127M supplied and $100M borrowed, at 78.5% utilisation. DAI supply on Ethereum Core has remained stable through recent changes in the USDS savings rate and in competing DAI rates. We propose a 5 percentage point increase, which lowers the supply APY by about 17 bps, from 2.6% to 2.4%. Impact: +$217,486/yr.
Rationale: Avalanche
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Avalanche |
WAVAX |
20% |
50% |
$52,919,721 |
-38 |
$532,443 |
| Avalanche |
USDC |
10% |
25% |
$60,960,281 |
-61 |
$416,862 |
| Avalanche |
USDt |
10% |
25% |
$22,645,837 |
-78 |
$193,282 |
| Avalanche |
DAI.e |
25% |
90% |
$2,115,720 |
-173 |
$53,383 |
| Avalanche |
WETH.e |
15% |
50% |
$2,771,444 |
-2 |
$3,447 |
Aave V4 is live on Avalanche, where the same assets earn supply incentives. We propose a larger increase on the V3 market so that its economics reflect the V4 alternative. USDC and USDt move to 25%, WAVAX moves to 50% in line with the volatile tokens above, and DAI.e, a bridged legacy reserve, moves to 90%. Combined impact: +$1,199,417/yr.
Rationale: Polygon
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Polygon |
USDT0 |
25% |
30% |
$21,781,874 |
-25 |
$78,910 |
| Polygon |
USDC |
20% |
25% |
$17,447,981 |
-24 |
$61,193 |
| Polygon |
DAI |
25% |
70% |
$2,656,890 |
-270 |
$94,373 |
| Polygon |
WETH |
15% |
25% |
$9,093,664 |
-6 |
$17,308 |
Polygon activity on Aave has been declining. We propose a moderate increase on USDT0, USDC and WETH, and a larger one on DAI, which is a legacy reserve on this network. Combined impact: +$251,784/yr.
Rationale: Optimism, Gnosis, Linea and BNB Chain
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| BNB Chain |
ETH |
15% |
25% |
$7,729,270 |
-7 |
$11,544 |
| Optimism |
USDC |
10% |
15% |
$9,524,587 |
-42 |
$42,472 |
| Optimism |
WETH |
15% |
20% |
$13,247,105 |
-7 |
$11,871 |
| Optimism |
USDT |
10% |
15% |
$3,368,219 |
-21 |
$7,846 |
| Gnosis |
EURe |
10% |
15% |
$11,546,910 |
-19 |
$26,988 |
| Gnosis |
USDC.e |
10% |
20% |
$1,647,357 |
-38 |
$7,233 |
| Linea |
WETH |
15% |
20% |
$3,966,775 |
-7 |
$4,044 |
| Linea |
USDC |
10% |
15% |
$1,066,376 |
-34 |
$3,899 |
These are small markets with limited growth. We propose 5 to 10 percentage point increases on their main reserves; supply APY decreases by 7 to 42 bps. Stablecoin reserves on BNB Chain are unchanged. Combined impact: +$115,896/yr.
Rationale: Ethereum Prime wstETH
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Ethereum Prime |
wstETH |
5% |
50% |
$37,549,348 |
-3 |
$32,337 |
wstETH utilisation on Prime is 31%, and its supply APY is 6 bps. Prime suppliers use wstETH as collateral and are not meaningfully exposed to the supply rate. Impact: +$32,337/yr.
Rationale: Aave V2 Ethereum
| Network |
Asset |
Current RF |
New RF |
Borrowed |
Supply APY change (bps) |
Revenue change (/yr) |
| Ethereum V2 |
USDC |
85% |
99.99% |
$5,111,761 |
-40 |
$81,997 |
| Ethereum V2 |
DAI |
85% |
99.99% |
$1,693,350 |
-33 |
$27,044 |
| Ethereum V2 |
WETH |
85% |
99.99% |
$1,720,813 |
-16 |
$20,682 |
| Ethereum V2 |
USDT |
85% |
99.99% |
$1,341,154 |
-22 |
$20,310 |
| Ethereum V2 |
WBTC |
90% |
99.99% |
$114,307 |
-1 |
$2,542 |
Following the Aave V2 deprecation plan, all V2 Ethereum reserves are frozen, so suppliers cannot add liquidity and no new positions can open. We propose raising the RF on the remaining borrowed reserves from 85% (90% on WBTC) to 99.99%, directing nearly all remaining interest to the DAO. With no meaningful supply yield left, remaining suppliers have a reason to withdraw, which raises utilisation and the borrow rate and pushes open positions to close. Impact: +$152,574/yr.
Specification
The following RF updates are proposed. All other reserve parameters remain unchanged.
Ethereum Core (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| DAI |
0x6B175474E89094C44Da98b954EedeAC495271d0F |
25% |
30% |
| WBTC |
0x2260FAC5E5542a773Aa44fBCfeDf7C193bc2C599 |
50% |
100% |
| cbBTC |
0xcbB7C0000aB88B473b1f5aFd9ef808440eed33Bf |
50% |
100% |
| wstETH |
0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0 |
35% |
100% |
| LINK |
0x514910771AF9Ca656af840dff83E8264EcF986CA |
20% |
50% |
| weETH |
0xCd5fE23C85820F7B72D0926FC9b05b43E359b7ee |
45% |
100% |
| tBTC |
0x18084fbA666a33d37592fA2633fD49a74DD93a88 |
50% |
100% |
| FBTC |
0xC96dE26018A54D51c097160568752c4E3BD6C364 |
75% |
100% |
| cbETH |
0xBe9895146f7AF43049ca1c1AE358B0541Ea49704 |
15% |
100% |
| rETH |
0xae78736Cd615f374D3085123A210448E74Fc6393 |
15% |
100% |
Ethereum Prime (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| wstETH |
0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0 |
5% |
50% |
Plasma (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| USDT0 |
0xB8CE59FC3717ada4C02eaDF9682A9e934F625ebb |
5% |
7.5% |
| USDe |
0x5d3a1Ff2b6BAb83b63cd9AD0787074081a52ef34 |
25% |
35% |
| GHO |
0xb77E872A68C62CfC0dFb02C067Ecc3DA23B4bbf3 |
5% |
10% |
Base (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| cbBTC |
0xcbB7C0000aB88B473b1f5aFd9ef808440eed33Bf |
50% |
100% |
| cbETH |
0x2Ae3F1Ec7F1F5012CFEab0185bfc7aa3cf0DEc22 |
15% |
100% |
| wstETH |
0xc1CBa3fCea344f92D9239c08C0568f6F2F0ee452 |
5% |
100% |
| weETH |
0x04C0599Ae5A44757c0af6F9eC3b93da8976c150A |
45% |
100% |
Arbitrum (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| WBTC |
0x2f2a2543B76A4166549F7aaB2e75Bef0aefC5B0f |
50% |
100% |
| ARB |
0x912CE59144191C1204E64559FE8253a0e49E6548 |
20% |
50% |
| LINK |
0xf97f4df75117a78c1A5a0DBb814Af92458539FB4 |
20% |
50% |
| weETH |
0x35751007a407ca6FEFfE80b3cB397736D2cf4dbe |
45% |
100% |
Avalanche (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| USDC |
0xB97EF9Ef8734C71904D8002F8b6Bc66Dd9c48a6E |
10% |
25% |
| WAVAX |
0xB31f66AA3C1e785363F0875A1B74E27b85FD66c7 |
20% |
50% |
| USDt |
0x9702230A8Ea53601f5cD2dc00fDBc13d4dF4A8c7 |
10% |
25% |
| DAI.e |
0xd586E7F844cEa2F87f50152665BCbc2C279D8d70 |
25% |
90% |
| WETH.e |
0x49D5c2BdFfac6CE2BFdB6640F4F80f226bc10bAB |
15% |
50% |
| BTC.b |
0x152b9d0FdC40C096757F570A51E494bd4b943E50 |
50% |
100% |
| WBTC.e |
0x50b7545627a5162F82A992c33b87aDc75187B218 |
50% |
100% |
Polygon (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| USDT0 |
0xc2132D05D31c914a87C6611C10748AEb04B58e8F |
25% |
30% |
| USDC |
0x3c499c542cEF5E3811e1192ce70d8cC03d5c3359 |
20% |
25% |
| DAI |
0x8f3Cf7ad23Cd3CaDbD9735AFf958023239c6A063 |
25% |
70% |
| WETH |
0x7ceB23fD6bC0adD59E62ac25578270cFf1b9f619 |
15% |
25% |
| WPOL |
0x0d500B1d8E8eF31E21C99d1Db9A6444d3ADf1270 |
20% |
50% |
| WBTC |
0x1BFD67037B42Cf73acF2047067bd4F2C47D9BfD6 |
50% |
100% |
| wstETH |
0x03b54A6e9a984069379fae1a4fC4dBAE93B3bCCD |
5% |
100% |
BNB Chain (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| ETH |
0x2170Ed0880ac9A755fd29B2688956BD959F933F8 |
15% |
25% |
| BTCB |
0x7130d2A12B9BCbFAe4f2634d864A1Ee1Ce3Ead9c |
20% |
100% |
X Layer (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| xBTC |
0xb7C00000bcDEeF966b20B3D884B98E64d2b06b4f |
10% |
100% |
Optimism (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| USDC |
0x0b2C639c533813f4Aa9D7837CAf62653d097Ff85 |
10% |
15% |
| WETH |
0x4200000000000000000000000000000000000006 |
15% |
20% |
| USDT |
0x94b008aA00579c1307B0EF2c499aD98a8ce58e58 |
10% |
15% |
| WBTC |
0x68f180fcCe6836688e9084f035309E29Bf0A2095 |
50% |
100% |
| wstETH |
0x1F32b1c2345538c0c6f582fCB022739c4A194Ebb |
5% |
100% |
Gnosis (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| EURe |
0xcB444e90D8198415266c6a2724b7900fb12FC56E |
10% |
15% |
| USDC.e |
0x2a22f9c3b484c3629090FeED35F17Ff8F88f76F0 |
10% |
20% |
| GNO |
0x9C58BAcC331c9aa871AFD802DB6379a98e80CEdb |
20% |
50% |
Linea (Aave V3)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| WETH |
0xe5D7C2a44FfDDf6b295A15c148167daaAf5Cf34f |
15% |
20% |
| USDC |
0x176211869cA2b568f2A7D4EE941E073a821EE1ff |
10% |
15% |
Ethereum (Aave V2)
| Asset |
Underlying |
Current Reserve Factor |
Proposed Reserve Factor |
| USDC |
0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48 |
85% |
99.99% |
| DAI |
0x6B175474E89094C44Da98b954EedeAC495271d0F |
85% |
99.99% |
| WETH |
0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2 |
85% |
99.99% |
| USDT |
0xdAC17F958D2ee523a2206206994597C13D831ec7 |
85% |
99.99% |
| WBTC |
0x2260FAC5E5542a773Aa44fBCfeDf7C193bc2C599 |
90% |
99.99% |
Disclaimer
TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100086 and the KPI as outlined in this publication. The scope of this engagement is available via this forum proposal.
TokenLogic supports and maintains an independent delegate voting platform within the Aave community.
TokenLogic and associated entities have no undisclosed material conflicts of interest at the time of submission.
Next Steps
- Gather feedback from the community.
- Escalate this proposal to the AIP stage.
Copyright
Copyright and related rights waived via CC0.