Aave has reopened frozen markets with new restrictions on borrowing and collateral use following an emergency freeze on October 29. Risk service provider LlamaRisk implemented lower borrowing ceilings and temporary interest-rate adjustments across Aave V3 and V4 on October 30, with additional changes to GHO borrow caps queued for the Core and Prime markets.
Borrowing Capacity Changes
LlamaRisk's cap methodology targets reserves with significant pre-exploit borrowing, aiming to preserve access while limiting new exposure. For major stablecoins, the new ceilings maintain borrowing room above pre-exploit levels. Core USDT's new cap sits at 2,560 million USDT with 55.3 million USDT of additional capacity, while Core USDC's cap of 2,270 million USDC leaves 54.1 million USDT of headroom above earlier borrowing levels.
The measure removes approximately $3.8 billion of unused borrowing capacity overall, according to LlamaRisk estimates. Separately, GHO borrow caps will be reduced from 150 million GHO to 105 million GHO on Core and from 85 million to 35 million GHO on Prime.
New Collateral Restrictions
LlamaRisk's rollback plan blocks new borrowing against nine assets including USDT, USDC, POL, WAVAX, and OP, along with wrapped and bridged versions. These tokens retain zero collateral borrowing power for new loans. Existing borrowers using these assets as collateral are not immediately affected on V3, where liquidation thresholds remain unchanged.
On V4, existing positions retain their current configuration until an account makes a new borrow, collateral withdrawal, or collateral toggle, at which point the zero-factor rules apply.
Interest Rate and Market Access
LlamaRisk also executed temporary reductions to Slope2, the steep portion of Aave's borrowing-rate curve above optimal utilization. This adjustment aims to ease pressure on existing borrowers without requiring principal repayment or new deposits.
Market access depends on multiple factors: restored borrowing caps, lower interest rates, collateral eligibility, and available pool liquidity. During the freeze period, new supply and borrowing were blocked while withdrawals, repayments, and liquidations remained enabled. Core USDC utilization reached 97.8% as of October 30, with several other reserves at full capacity.
