LlamaRisk Proposes Narrowing Aave V3 Core Collateral to Blue-Chip Assets

This is a structural risk-tiering move: Aave's core market would shed long-tail collateral and push it to V4, effectively separating liquidity risk from the flagship pool. The immediate mechanism is defensive — freezing deposits and zeroing LTV without touching existing positions — so the near-term effect is asymmetric: no forced unwinds, but no new capital can enter those markets either. The open question is whether the migration path to V4 preserves borrowing demand for assets like rsETH, osETH and the BTC wrappers, or whether the freeze itself starts to erode their on-chain liquidity before any V4 venue exists to absorb them.