The proposal, published to the Aave governance forum, targets two separate cleanup tracks. The first covers Aave V2, the protocol's aging lending infrastructure, which has been in a managed wind-down for more than a year. The second targets low-volume, volatile collateral assets on Aave V3 that generate minimal revenue relative to the operational and risk overhead they create. Three chains, zkSync, Metis, and Soneium, are slated for complete deployment shutdowns under the current scope.

The assets in question account for a small fraction of Aave's total footprint. V3 currently holds roughly $13.98 billion in supplied assets across 21 chains, meaning the reserves under review represent roughly 0.7% of that total. But governance contributors argue that small size does not equal small risk.

"The risk/reward from long tail assets is simply not suited to justify maintenance of these assets inside the Aave ecosystem," wrote Marc Zeller of the Aave Chan Initiative in comments accompanying the proposal. Revenue data supports that view: Curve's CRV token, the single largest revenue contributor among the assets targeted for V3 offboarding, generated roughly $80,000 in year-to-date protocol fees. All other affected assets combined added about $37,000, bringing the total annual revenue from all assets targeted for deprecation to approximately $117,000.

The V3 offboarding list includes governance and protocol utility tokens such as UNI, CRV, BAL, ENS, LDO, RPL, and 1INCH on Ethereum, along with assets like ZK, SCR, CELO, LINK, OP, CAKE, ARB, and METIS across other chains. On the V2 side, the protocol carries approximately $954,000 in bad debt, up from roughly $706,000 in August 2024, with assets including the elastic-supply token AMPL and the defunct stablecoin BUSD making up roughly 88.5% of that figure. Ethereum markets account for 98% of the V2 bad debt total.

The deprecation push is unfolding against a backdrop of significant institutional change inside Aave. BGD Labs, the core technical contributor to V3, ended its engagement in April 2026. Chaos Labs, the long-running risk parameter advisor, also departed. LlamaRisk now leads risk management and has been central to drafting the current offboarding proposals. The firm's rationale for V2 closure was straightforward: "Moving forward by disabling new borrows on all assets is the next logical step to accelerate the deprecation of V2. The proposed minimum base rate of 20% coupled with a Slope 2 of 300% creates strong incentives for borrowers to repay." These service provider transitions coincided with a March 2026 wstETH CAPO oracle malfunction that caused $1.03 million in wrongful liquidations across 47 positions, reinforcing the DAO's appetite for eliminating complex, low-value market exposures.

An April 2026 exploit targeting KelpDAO's LayerZero bridge infrastructure sharpened the DAO's appetite for this kind of cleanup. An attacker generated approximately 116,500 unbacked rsETH tokens and deposited them into Aave V3, creating up to $230 million in potential bad debt and triggering a $6.6 billion TVL drawdown in a single weekend. During that exploit weekend specifically, TVL fell from $26.4 billion to roughly $20 billion. DeFi United raised $160 million to cover the losses and rsETH backing was restored by June 2026, but the incident reinforced governance arguments for cutting exposure to complex, low-yield integrations. Aave's protocol TVL currently sits at approximately $14.5 billion, down from highs above $34 billion recorded earlier in 2026 before the broader drawdown period began.

The technical destination for this consolidation is Aave V4, which launched on Ethereum mainnet on March 30, 2026 and extended to Avalanche on July 15, 2026. V4 replaces the per-asset reserve model with a hub-and-spoke structure: a central liquidity hub holds assets collectively while specialized spoke markets operate with isolated risk parameters. That architecture requires a cleaner reserve inventory to function as intended. Deployments on Arbitrum, Optimism, and Base are pending, contingent on stability data from the Avalanche rollout through the third quarter of 2026.

The more structural development running alongside the reserve cleanup is a separate but related Temp Check proposal establishing a $2 million annual revenue floor for any Aave V3 deployment. Seven chains currently generate less than $3 million in annualized revenue, putting them in range of the $2 million floor: Polygon, Gnosis, BNB Chain, Optimism, Scroll, Sonic, and Celo. These deployments face reserve factor increases now and full offboarding if they cannot cross the threshold within 12 months. For Indian retail users, Polygon remains the most accessible low-cost Ethereum-compatible chain for DeFi activity, and any move toward shutting it down would push those users toward higher-fee alternatives. In Pakistan, where stablecoins serve critical roles in remittances and inflation hedging, the current round of reserve deprecations carries minimal direct impact, though the $2 million revenue floor creates structural barriers to future regional deployments gaining governance support. For Nigerian and broader African users, who access Aave predominantly through Polygon and BNB Chain, the immediate reserve deprecations are largely irrelevant since the assets being cut are not widely used in those markets. The longer-term concern is that the $2 million revenue bar makes it structurally harder for emerging-market communities to advocate for new regional deployments through Aave governance.

The proposal remains in the temperature-check phase. An on-chain AIP (Aave Improvement Proposal) vote has not yet been scheduled, and the final scope of affected reserves may change before governance reaches a formal decision. The $98.1 million figure reflects the proposal's stated scope; final on-chain amounts may differ once an AIP is formally submitted.