Aave will shut its lending markets on six blockchains and strip out dozens of little-used assets in a sweeping clean-up affecting $98.1m in deposits, as the decentralised lending protocol concentrates on larger, higher-yield markets.
The changes, set out in a new governance proposal, would see Aave fully winding down its deployments on Sonic, Scroll, Aptos, zkSync, Metis and Soneium, while also delisting a broad range of assets elsewhere that generate limited activity but add to the platform’s technical and financial exposure.
In total, the proposal targets the removal of 50 individual asset reserves and 21 matured Pendle principal tokens across 11 separate deployments. Combined, those markets currently account for $98.1m of supplied liquidity and $15.6m in outstanding loans.
Aave founder Stani Kulechov said the move follows “a comprehensive review” and is designed to reduce the protocol’s “economic and technical risk surface.”
Network scale-down in numbers
The six blockchains earmarked for a full exit host 25 asset reserves between them, with $12.8m in deposits and $4.1m in debt.
By network, Sonic accounts for $7.6m of that supply, Scroll $2.2m, Aptos $1.7m, zkSync $0.8m, Metis $0.3m and Soneium $0.2m. The other assets to be removed from Aave’s remaining deployments represent the bulk of the overhaul, with $85.3m in deposits and $11.5m in borrowing activity.
Many of the reserves included in the proposal have already been frozen or have had their deposit and borrowing ceilings scaled back sharply, reflecting limited demand and growing concern over their cost-benefit profile.
Under the plan, Aave would formally freeze the affected reserves and cut supply and borrowing caps to token amounts. On markets where loans are still active, the protocol would increase reserve factors and interest rates, a mechanism intended to nudge borrowers to repay and prompt liquidity providers to withdraw.
Cost pressures behind retrenchment
The governance proposal argues that every listed asset on Aave imposes fixed costs, including maintaining price oracles, continuous risk analysis and ensuring robust liquidation infrastructure. On the six smaller networks, the income generated is now below the expense of sustaining those deployments.
Kulechov, replying to questions on how frequently Aave undertakes this type of scrutiny, said: “It’s a continuous review.”
He also warned against interpreting the retrenchment as a verdict on the quality or prospects of the blockchains that are losing Aave markets.
“The recent low adoption asset and network wind-downs on Aave should not be interpreted as a view on any L1 or L2,” he said.
Focus shifts to core markets and new products
Rather than spreading itself across as many networks and assets as possible, Aave plans to redeploy its resources into larger, more established markets and new lines of business, including securities finance.
Kulechov stressed that layer-2 networks still play a “very important” role in improving the user experience on Ethereum, particularly for consumer-facing products. He also highlighted Avalanche’s efforts in the field of tokenised real-world assets as an example of the type of innovation Aave will continue to watch closely.
The restructuring comes after Aave adopted broader risk and technical listing frameworks. These standards demand ongoing monitoring of markets and give the protocol clear criteria to revisit the status of specific assets or entire deployments if trading activity, liquidity or supporting infrastructure fall below required thresholds.
Market position unchanged – but strategy refined
Despite the decision to step back from several chains and rationalise its long tail of assets, Aave remains the largest decentralised lending platform by total value locked. It currently holds around $14.5bn across 23 blockchains, according to data provider DefiLlama.
The latest overhaul underlines a strategic shift. Instead of prioritising a presence on as many networks as possible, Aave is opting to concentrate liquidity and risk management on a narrower set of markets as it prepares for what it views as the next phase of its growth.
