Aave to wind down V3 on 6 low-revenue chains
Aave is considering a staged wind-down of its V3 deployments on six blockchains: Sonic, Scroll, zkSync, Metis, Soneium, and Aptos. The move follows a proposal from Aave risk provider LlamaRisk, citing weak protocol economics and high support costs.
Under the Aave plan, a first step would freeze 25 lending reserves across the six markets, cut each reserve’s supply/borrow caps to 1, and redirect nearly all borrower interest to Aave’s treasury. LlamaRisk estimates these chains currently generate less than $5,000 in quarterly revenue at current balances (Sonic, Scroll, zkSync each under ~$5,000; Metis, Soneium, Aptos under ~$1,000). While existing positions would remain open initially, later steps could change rates, collateral factors (via reserve factors/liquidation thresholds), and oracle pricing.
The proposal relates to an ARFC (Aave Request for Final Comments) lifecycle, with community voting and any executable Aave Improvement Proposal to follow. For accounts managing the protocol, the design explicitly aims to reduce immediate liquidation risk by keeping positions open during the initial freeze, while saving stronger “unwind levers” for later if needed.
Traders should note the potential signaling impact: Aave is actively reallocating capital away from underperforming markets, which can affect chain-level sentiment around Aave integration, liquidity expectations, and DeFi lending yields in the short term.
Bearish
The news is bearish because Aave is effectively reducing exposure to underperforming markets. LlamaRisk’s economic case argues that several Aave V3 deployments are generating very low borrower interest revenue versus operational/oracle support costs. Freezing reserves, cutting caps to 1, and redirecting interest to the Aave treasury can compress supplier yields and reduce incentive-driven liquidity on those chains—typically a short-term negative for DeFi activity and token sentiment.
In the short term, traders may see lower expected TVL/utilization on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos as supply/borrow growth is choked by cap reductions. That can pressure lending-related metrics (utilization, deposit rates) and spill into broader market perception of DeFi integrations.
In the longer term, however, Aave may be improving capital efficiency and risk-adjusted returns by concentrating on healthier markets. This resembles past “protocol rebalancing” cycles seen in mature DeFi lending (where assets are shifted away from inefficient venues), which can stabilize the protocol’s overall economics even if specific chains suffer temporarily.