Aave Winds Down Low-Use Assets and Six Blockchain Networks

Aave founder Stani Kulechov announced on July 30 that the lending protocol plans to retire dozens of low-use asset reserves and wind down its deployments on six blockchain networks. The proposal targets six deployments holding $12.8 million supplied and $4.1 million in outstanding debt.

The largest affected positions include FBTC and eBTC wrappers on Ethereum, which hold about $16.3 million in supply but only around $63,000 in borrowing. Their balances have fallen sharply because the expected demand for using them as collateral did not develop.

Aave would initially freeze affected reserves and reduce supply and borrowing caps to one unit. Existing positions could remain open, but users would be unable to make new deposits, borrow more funds or use the affected assets as fresh collateral.