TREE NEWS update: LlamaRisk has proposed withdrawing $1.33 billion in collateral from Aave’s core market. Affected reserves would be frozen first, leaving existing loans open while borrowers either switch collateral or migrate to Aave V4. The proposal sets out a phased exit rather than an immediate liquidation of the positions.
LlamaRisk Proposes $1.33B Collateral Exit From Aave Core
The significance here is procedural rather than price-driven: a risk steward is testing whether a large collateral base can be unwound through an orderly, phased migration instead of a forced liquidation, with frozen reserves and open loans as the buffer. That affects borrowers using the affected reserves most directly, plus anyone watching how Aave's core-to-V4 transition is managed. The open question is whether the phased structure holds if borrowers are slow to switch collateral or move to V4.
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