Stani Kulechov, the founder of Aave, shared a proposal from LlamaRisk, the protocol’s risk manager, to reposition Aave V3 Core, the platform’s largest market, toward higher‑quality, liquid collateral. The plan would strip out restaking assets, leveraged wrapping strategies, issuers that do not meet Aave’s risk standards, and low‑demand reserves, potentially moving $1.52 billion of collateral that backs $1.17 billion of debt. Kulechov explained that as the risk environment changes and Aave V4 expands, tightening V3 Core’s risk profile will raise the bar for collateral eligibility. Some of the removed assets could be migrated to isolated V4 markets, where more granular risk controls allow for better risk‑reward alignment. The proposal remains subject to governance voting and dialogue with asset issuers, and Kulechov reaffirmed Aave’s commitment to continuous risk assessment across all deployments.

“LlamaRisk proposes repositioning Aave V3 Core, Aave's largest market, to focus on liquid, blue-chip collateral. The proposal would remove several categories of exposure: 1. Restaking assets 2. Leveraged wrapping strategies 3. Issuers whose operational and security resources fall short of Aave's risk standards 4. Low-demand reserves that no longer justify ongoing maintenance This means potentially moving $1.52B in collateral backing $1.17B in debt out of V3 Core in favour of blue-chip collateral. As the risk landscape evolves and Aave V4 grows, the goal is to sharpen V3 Core's risk profile and raise the bar for collateral eligibility. Some affected assets could transition to isolated Aave V4 markets, where more granular risk controls allow for better risk-reward alignment. The proposal comes from LlamaRisk, an Aave Protocol Risk Manager, and remains subject to governance discussions”

— Stani Kulechov (@StaniKulechov) on X · X ↗

Stani Kulechov is not affiliated with COINMAG. The quote comes from a public post on X; the context was written by the COINMAG newsroom.