Proposal to Remove Approximately $3.8 Billion in Unused Borrowing Capacity: LlamaRisk Proposes Lowering Aave V3 and V4 Caps

Odaily Report: Risk service provider LlamaRisk has proposed lowering the borrowing caps for a total of 27 reserves on Aave V3, as well as the withdrawal caps for a total of 6 credit lines on Aave V4, with the new caps set at approximately 1.02 times the borrowing amounts prior to the attack. Previously, Aave froze V3 and V4 reserves following the October 29 Binance hot wallet incident; this adjustment will remove approximately $3.7 billion in unused capacity on V3 and approximately $130 million on V4. Taking V3 Core as an example, the WETH borrowing cap will be reduced from 2.4 million to 1.79 million, while the USDT and USDC borrowing caps will be lowered to 2.56 billion and 2.27 billion, respectively. LlamaRisk stated that the attacker still holds a large amount of ETH, stablecoins, and governance tokens, and could rapidly establish large positions once the market is unfrozen.