Aave governance vote to sunset six chains signals DeFi’s institutional risk pruning
A $98.1m Aave clean-up proposal to retire underused reserves and six blockchain deployments highlights DeFi lending's shift towards active balance-sheet discipline.
Aave, the largest decentralised lending protocol by total value locked, has put forward a governance proposal to wind down operations on six blockchain networks and retire dozens of underused reserves, in a clean-up affecting $98.1 million in supplied assets and $15.6 million in outstanding debt.
Aave founder Stani Kulechov confirmed the proposal on 30 July, describing it as the outcome of a comprehensive review of the protocol’s deployments. The plan requires approval through Aave’s DAO governance process before it can be implemented in full, and does not force immediate exits for existing users.
Six networks singled out for exit
The proposal would orderly wind down Aave’s deployments on Sonic, Scroll, zkSync, Metis, Soneium and Aptos, closing 25 asset reserves across those six chains. Together, they hold $12.8 million in combined supply and $4.1 million in outstanding debt — a fraction of Aave’s overall balance sheet.
Sonic is the largest of the six, with $7.6 million supplied and $2.7 million borrowed, though its deposits have fallen 74% over six months. Scroll deposits dropped 86% to $2.2 million, while zkSync fell 88% to $844,000. Metis and Soneium have shrunk to $297,000 and $173,000 respectively, and Aptos liquidity fell 94% over the same period, leaving $1.7 million supplied and $719,000 borrowed.
Risk provider LlamaRisk assessed that these deployments generate insufficient revenue to justify the ongoing cost of maintaining price feeds, monitoring systems and operational support — an assessment reported alongside the proposal, though it remains subject to DAO review rather than settled fact.
Fifty reserves and matured Pendle tokens also targeted
Beyond the six full network exits, the proposal separately marks 50 low-adoption reserves and 21 matured Pendle principal tokens for removal across eleven Aave deployments, together accounting for $85.3 million in supplied assets and $11.5 million in debt — the bulk of the total figures under review.
Among the assets flagged are older bridged tokens, duplicate versions of assets that now have native alternatives — such as bridged USDC in markets where native USDC is already available — and wrapped bitcoin products. The FBTC and eBTC wrappers on Ethereum are the largest single positions affected, holding roughly $16.3 million in supply against only around $63,000 in active borrowing, reflecting collateral demand that never materialised.
Aave’s DAO began exploring Pendle principal tokens as collateral in 2025. The current proposal would retire the 21 tokens that have since reached maturity, while allowing newer maturities to take their place where governance deems appropriate.
Orderly wind-down mechanism, not a forced exit
Under the proposed mechanism, affected reserves would initially be frozen, with supply and borrowing caps reduced to a single unit. Existing positions could remain open, but users would be unable to make new deposits, and higher borrowing rates would be used to encourage an orderly exit from the affected markets rather than an abrupt liquidation event.
The proposal illustrates a broader trend in decentralised finance towards more disciplined balance-sheet management, as leading protocols increasingly treat idle or loss-making markets as a governance liability rather than a permanent feature. For a protocol the size of Aave, the sums involved are modest relative to total deposits, but the exercise offers a rare public accounting of which chains and collateral types have failed to gain sustained traction despite earlier expansion efforts.
Read more: GMX DAO diverts staker fees into $2.4m buyback as governance sets $90 unlock bar
