Aave Winds Down Six Blockchain Deployments Amid Low Adoption

Aave, the largest lending protocol in DeFi, is planning to wind down six smaller blockchain deployments due to low adoption and revenue. The deployments on Sonic, Scroll, zkSync, Metis, Soneium, and Aptos have generated less than $5,000 per quarter, making it no longer viable for Aave to maintain them.

The proposal by LlamaRisk, a risk adviser partly funded by the Aave DAO, suggests that these markets will be frozen to prevent new deposits, borrowing, and collateral. The suppliers will earn less interest while the borrowers will pay more with a 5% base borrowing rate introduced. Eventually, both groups will exit these markets without Aave having to force them.

The plan also includes retiring dozens of underused markets containing $98.1 million in supplied assets and $15.6 million in outstanding debt. The total value of the assets affected is substantial, highlighting the significance of this decision for the DeFi ecosystem.