Aave Restarts Frozen Markets With New Restrictions

The Aave protocol has reopened markets that were temporarily frozen after a recent incident. The measure allows for the return of some operations although new collateralized loans remain blocked.

LlamaRisk implemented adjustments to borrowing caps and interest rate changes for versions V3 and V4. These changes aim to preserve credit capacity and align limits with levels observed before the event.

The review process removed approximately 3.8 billion dollars in unused capacity from the system. The caps were calculated based on loan volume prior to the incident while adding a safety margin of roughly 2 percent.

During the freezing period only withdrawals, repayments, and liquidations were permitted. The new structure prevents users from adding extra collateral to frozen reserves while credit limits are active.

Reductions in GHO issuance limits are also in the processing queue. The main market cap will drop to 105 million GHO while the Prime market limit will be reduced to 35 million GHO.