Aave's governance community is weighing a major consolidation of its multichain presence. A new proposal recommends winding down V3 markets on six blockchains and removing dozens of low-activity token reserves from the lending protocol. If approved, the cleanup would affect roughly $98.1 million in supplied assets and $15.6 million in debt, as measured on July 28.

What the proposal covers

Risk management service LlamaRisk, working with other Aave service providers, recommended offboarding 50 low-use reserves and 21 matured Pendle principal token listings across 11 deployments. In addition, the proposal calls for retiring all 25 reserves on Sonic, Scroll, zkSync, Metis, Soneium and Aptos.

An ARFC is a detailed proposal and precursor to an Aave Improvement Proposal. It is not, by itself, proof of a completed final onchain vote or execution.

Aptos market facing early exit

The proposed Aptos exit comes just 11 months after Aave launched its V3 market there. According to LlamaRisk, available liquidity has dropped 94% over six months, and quarterly revenue is below $1,000. The rapid deterioration illustrates how quickly a deployment can lose relevance in the competitive DeFi landscape.

Every reserve on Scroll, zkSync, Metis and Soneium was already frozen, whereas Sonic and Aptos remained active and are recommended for freezing. The temp check on Aave's multichain strategy concluded on Dec. 5, 2025, with 923,400 votes in favor and under 1% against. That vote supported increasing the reserve factor on underperforming instances, shutting down the instances on zkSync, Metis and Soneium, and establishing a $2 million annual revenue floor for new instance deployment.

Scroll's accelerated deprecation

Scroll was added to the affected protocols through an accelerated process in April. LlamaRisk filed a direct-to-AIP proposal to freeze every Scroll reserve and raise selected reserve factors, describing the measure as completing Scroll's deprecation after a rapid deterioration in network liquidity and Aave market activity.

The move reflected growing concerns about the sustainability of smaller Layer 2 networks. Many chains launched in recent years have struggled to attract meaningful liquidity, and Aave's risk framework is designed to identify such cases early.

Updated risk framework

Aave also published an updated risk framework on June 9, covering asset, bridge, monitoring and chain risk, and criteria for winding down reserves or deployments. This month's announcement indicated de facto adoption of those rules by the protocol. The framework gives the community a structured way to evaluate when a market is no longer worth supporting.

Aave founder Stani Kulechov said in a Thursday post that this will also "reduce Aave's economic and technical risk surface as part of the new Aave Risk Framework and Technical Asset Listing Framework."

Not a reversal of multichain expansion

Still, this is not a reversal of Aave's multichain expansion strategy, rather a strategic refocusing on select protocols. "Aave will continue applying continuous risk assessment for all assets across all deployments," Kulechov said. The comments also follow Aave launching on Avalanche earlier this month.

The decision to close underperforming markets while expanding on more promising networks highlights a selective approach. Aave is not abandoning the idea of multichain, but it is becoming more disciplined about where it allocates resources.

Background on Aave

Aave is one of the largest decentralized lending protocols in the cryptocurrency industry. It allows users to supply and borrow a wide range of digital assets without relying on traditional intermediaries. The protocol's V3 architecture introduced improved capital efficiency, isolated risk parameters, and cross-chain functionality. Over time, Aave deployed V3 markets on numerous networks, including Ethereum, Polygon, Arbitrum, Optimism, Base, Avalanche, and several emerging Layer 2 and alternative Layer 1 blockchains.

The expansion was part of a broader trend in DeFi where protocols sought to capture users and liquidity across multiple chains. However, maintaining multiple deployments brings costs: smart contract risk, bridge exposure, oracle requirements, and community attention. When a chain's activity declines, the cost of keeping those markets alive may outweigh the benefits.

Aave's governance process is community-driven. Proposals typically begin as ARFCs, move through temperature checks, and eventually become Aave Improvement Proposals if they gain sufficient support. The process allows stakeholders to debate the trade-offs before any onchain action is taken.

Why low-use reserves matter

Reserves that see little borrowing or lending activity can still pose risks. Token prices may become volatile with thin liquidity, oracles may become unreliable, and the risk of bad debt can increase. By offboarding these reserves, Aave reduces the surface area for potential failures.

The inclusion of 21 matured Pendle principal token listings is notable. These tokens represent principal positions in yield-generating strategies and can become illiquid after their maturity date. LlamaRisk recommended removing them to simplify the protocol's risk profile.

Implications for the broader DeFi market

Aave's decision could set a precedent for other lending protocols. Many DeFi platforms have expanded aggressively to multiple chains, only to find that some markets fail to generate meaningful usage. Consolidating operations can improve capital allocation and risk management.

The move also signals that chain activity alone is not enough to justify a deployment. Aave's new $2 million annual revenue floor for new instances raises the bar for future expansions. Teams seeking to bring Aave to their chain will need to demonstrate a clear path to sustainable usage.

For the affected chains, the closure of Aave markets removes one of the major lending applications in their ecosystem. Users on those networks will need to migrate their positions or seek alternative services. The process is designed to be orderly, with freezing actions and reserve factor adjustments leading up to full wind-down.

What happens next

The ARFC is currently under discussion. If it receives enough support, it will move to a formal Aave Improvement Proposal for an onchain vote. The exact timeline depends on community feedback and technical preparation.

LlamaRisk and other service providers are expected to continue monitoring the affected markets and may propose additional steps as needed. The governance community will also keep an eye on new deployment opportunities, particularly on chains that show strong liquidity and user engagement.

In the meantime, Aave remains one of the largest protocols in DeFi, with billions of dollars in total value locked across its remaining markets. The consolidation effort is part of a maturity process, as the protocol moves from aggressive expansion to more careful stewardship.

Source:Cointelegraph News