Aave risk management firm proposes gradual exit from $1.33 billion in collateral

LlamaRisk, the risk manager for Aave, has proposed phasing out roughly $1.33 billion in collateral from Aave V3 Core that currently backs about $1.03 billion in debt, covering assets including rsETH, osETH, LBTC, tBTC and rETH as of Nov. 9. The initial step would freeze the affected reserves and set their loan-to-value ratios to zero, halting new supplies and borrowings against them while leaving existing loans unliquidated so borrowers can still repay, withdraw or migrate to Aave V4. The plan remains under discussion and must clear approval before going to on-chain governance. It matters because the move affects a large share of V3 Core collateral and signals tighter risk controls on liquid staking and bitcoin-wrapped assets. Watch whether the freeze passes governance and whether borrowers migrate to V4; if migration stalls, LlamaRisk may progressively lower liquidation thresholds on some assets.