August 2025
Overview
LlamaRisk presents our August 2025 monthly update, summarizing key activities and outlining upcoming priorities.
Highlights
Recommendations and inputs
Asset onboarding
- [Direct-to-AIP] Add ezETH to Aave v3 Core Instance - Supported onboarding as it enables users to benefit from lower wstETH borrow rates on Core, while noting improvements in ezETH admin multisig threshold and timelock duration.
- [ARFC] Onboard USD1 to Aave V3 Core and BNB Instance - Supported onboarding while highlighting USD1 as a new BitGo product, noting lack of public audits, absence of a bug bounty, 92% token supply held by Binance, and high LP concentration.
- [Direct to AIP] Onboard sUSDe November expiry PT tokens on Aave V3 Core Instance - Supported onboarding given the relatively long maturity horizon, which justifies integration effort.
- [Direct to AIP] Onboard USDe November expiry PT tokens on Aave V3 Core Instance - Supported the listing due to long maturity, strong demand for Ethena assets, and healthy pool liquidity.
New chain
- [ARFC] Deploy Aave v3 on BOB - Highlighted governance and security enhancements for SolvBTC and xSolvBTC, including multisig migration and timelock implementation by the Solv team.
GHO related
- [ARFC] Launch GHO on Plasma & Set ACI as Emissions Manager for Rewards - Supported GHO launch with a measured approach, backing the parameters and strategy proposed by TokenLogic.
- [ARFC] Launch GHO on Linea & Set ACI as Emissions Manager for Rewards - Supported GHO launch, noting that Linea’s native yield mechanism creates opportunities for users to borrow GHO against bridged ETH.
E-modes
- [Direct-to-AIP] Arbitrum eMode Update - rsETH and ezETH - Supported changes, noting minimal incremental risk and benefits for Arbitrum DRIP user participation.
Misc.
- [Direct-to-AIP] Parameter Updates - zkSync, Scroll and Sonic - Supported the updates as they pose no additional risks to Aave and will contribute to market stability once incentives take effect.
- [ARFC] Automation of the Slope2 Parameter via Risk Oracles - Supported exploring this solution to mitigate interest rate shocks for highly utilized assets on Aave’s Core markets and provided analysis centered on discrete repayment behaviors of WETH and USDT borrowers.
Community Engagement
- Horizon Collaboration - Engaging closely with Aave, Chainlink, and asset issuers as a Risk Service Provider to support the development of this new market, building robust parameterization frameworks and RWA NAV feeds, thus ensuring transparent and effective risk management.
- Newsletter: This Week in Aave - Continued delivering weekly roundups of Aave governance updates while enhancing content with a fresh look and deeper insights for stakeholders and users.
Upcoming Focus Areas
- Bug Bounty Roundup - A report analyzing the bug bounty programs for assets currently listed on Aave V3, with planned recommendations for improving coverage, incentivization, and overall protocol security.
- Umbrella Early Insights: A detailed case study reviewing the first three months of the Umbrella Safety Module, examining user distribution, staking patterns, and preliminary trends in capital allocation across each module.
- Aave V4 Preparation - Actively reviewing the proposed architectural changes introduced in the V4 codebase shared with DAO Service Providers and adapting our current risk frameworks to ensure a seamless transition.
We welcome community feedback and suggestions. Please share any questions, ideas, or areas where you would like increased focus from the LlamaRisk team.