Aave considers higher Bitcoin and ether borrowing limits as liquidation price cushions narrow
Aave governance is weighing proposals that would raise Bitcoin and ether borrowing limits while narrowing the buffer before liquidation.
Why it matters
Higher loan-to-value ceilings give borrowers more capital against the same collateral but shorten the price drop needed to liquidate a position. LlamaRisk's case rests on one year of liquidation data showing economically meaningful positions cleared within minutes under existing parameters, which does not establish how the new settings would fare in a sharp market move. Nothing is live yet; the parameters sit in Aave governance.
Where the sources disagree
Proposal scope
Covered assets WBTC and cbBTC on Aave V3 Ethereum Core
CryptoSlate
Covered assets WETH, WBTC, cbBTC, wstETH and weETH across Ethereum, Base and Arbitrum
Bitcoinist
CryptoSlate describes the proposal as covering WBTC and cbBTC on Aave V3 Ethereum Core, while Bitcoinist describes an ARFC covering five assets across Ethereum, Base and Arbitrum.
Key facts
LlamaRisk proposed letting users on Aave V3 Ethereum Core borrow $0.81 against each $1 of WBTC or cbBTC collateral, up from $0.73.
0.81 USDReported by CryptoSlate
The liquidation threshold for WBTC and cbBTC would rise from 78% to 85%.
85 %Reported by CryptoSlate
At maximum borrowing the price cushion before liquidation would shrink from 6.4% to 4.7%.
4.7 %Reported by CryptoSlate
LlamaRisk said on Sept. 21 the proposal had advanced to Snapshot and voting would begin in less than 24 hours.
Reported by CryptoSlate
The proposal rests on one year of liquidation data showing that economically meaningful positions generally cleared within minutes under existing parameters.
Reported by CryptoSlate
A positive Snapshot vote would still need to be followed by an implementation AIP.
Reported by CryptoSlate
Bitcoinist reported the ARFC would raise the WETH loan-to-value ratio to 81% with an 84% liquidation threshold.
81 %Reported by Bitcoinist
Bitcoinist reported the proposal covers WETH, WBTC, cbBTC, wstETH and weETH across deployments on Ethereum, Base and Arbitrum.
Reported by Bitcoinist
What happened
CryptoSlate reported that risk provider LlamaRisk proposed letting users on Aave V3 Ethereum Core borrow $0.81 against each $1 of WBTC or cbBTC collateral, up from $0.73, with the liquidation threshold rising from 78% to 85%. At maximum borrowing the price cushion before liquidation would narrow from 6.4% to 4.7%. Bitcoinist separately reported an ARFC raising loan-to-value and liquidation-threshold parameters for WETH, WBTC, cbBTC, wstETH and weETH, including an 81% WETH loan-to-value ratio with an 84% liquidation threshold, across deployments on Ethereum, Base and Arbitrum. Both outlets stress the parameters are proposals, not live settings, and a positive Snapshot vote would still need to be followed by an implementation AIP. The vote result was unverified at the reporting cutoff.
How the story developed
- Official statement
LlamaRisk says proposal reached Snapshot on Sept. 21
- First report
First report by CryptoSlate
Narrowing price cushions leave Bitcoin loans vulnerable to 4.7% price dips as Aave weighs higher leverage
- Update
CryptoSlate reports LlamaRisk borrowing-limit proposal for Bitcoin collateral
Proposal advanced to Snapshot; voting was set to begin within 24 hours.
- Independent corroboration
Independently corroborated by Bitcoinist
Aave Proposal Seeks Higher Borrowing Limits For ETH And Bitcoin Collateral
How coverage built up
Independent sources over time, counted the way the consensus panel counts them: a republication of a wire story does not move the line.
- 22 Sept 2026, 17:00 UTC: CryptoSlate — 1 independent source, 1 reports
- 22 Sept 2026, 20:30 UTC: Bitcoinist — 2 independent sources, 2 reports
Affected entities
Original sources
| Publisher | Report | Role | Published |
|---|---|---|---|
| CryptoSlate Crypto media | Narrowing price cushions leave Bitcoin loans vulnerable to 4.7% price dips as Aave weighs higher leverage | Original | |
| Bitcoinist Crypto media | Aave Proposal Seeks Higher Borrowing Limits For ETH And Bitcoin Collateral | Independent |
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