Aave Plans to Phase Out Six Chains in $98 Million Cleanup

Aave Plans to Phase Out Six Chains in $98 Million Cleanup

Aave founder Stani Kulechov announced on July 30 that the lending protocol intends to retire numerous low-usage asset reserves, along with winding down deployments across six blockchain networks. This strategy involves approximately $98.1 million in supplied assets and $15.6 million in outstanding debt.

Details of the Cleanup Proposal

The proposed changes target deployments that currently hold around $12.8 million in supplied assets and $4.1 million in outstanding loans. As part of the initiative, Aave plans to retire 50 low-adoption reserves and 21 matured Pendle tokens. The affected chains include Sonic, Scroll, zkSync, Metis, Soneium, and Aptos.

Decline in Deposits Across Platforms

Recent metrics indicate a significant drop in deposits, with Sonic holding most at $7.6 million supplied, yet experiencing a 74% decrease over the past six months. Scroll and zkSync witnessed declines of 86% and 88%, respectively, with supplies dwindling to $2.2 million and $844,000.

Aptos has also struggled, suffering a 94% decrease, leaving it with $1.7 million supplied and $719,000 borrowed.

Financial Review Leading to Cleanup

The evaluations conducted by LlamaRisk concluded that these deployments generated inadequate revenue to sustain necessary operational costs, which includes maintaining price feeds and monitoring systems. This assertion is part of the broader governance review process.

Changes to Asset Reserves

Beyond the six targeted chains, the proposal also focuses on the removal of additional low-adoption reserves across 11 Aave deployments. This includes $85.3 million in supplied assets and $11.5 million in debt, representing older collateral and duplicate asset versions that now have native alternatives.

Once implemented, existing positions can remain active. However, Aave intends to freeze affected reserves, imposing restrictions on new deposits and borrowings while encouraging users to exit their positions.

Next Steps for Implementation

The proposal is currently undergoing the Aave Request for Comment (ARFC) stage, leading to the necessary governance processes before a final vote can occur. Users are encouraged to keep their positions open for the moment as the community discusses feedback and the timeline for implementation.

This strategic retreat marks a shift from Aave’s previously more expansive approach to deploying across emerging networks. Additionally, Aave is concentrating efforts on Aave V4, institutional markets, and higher-use deployments with a previous $25 million funding approval to bolster this strategy.

Aave maintains its position as the largest decentralized lending protocol, holding approximately $14.5 billion in total value across 23 different chains.