Aave will reduce its borrowing limits ahead of phased unfreezing to prevent attackers behind the Binance hack from establishing large positions.

DeFi risk and transparency service provider LlamaRisk posted in the Aave governance forum that it will lower borrowing caps for major lending markets via the Risk Steward mechanism ahead of the phased unfreezing of Aave V3 and V4, to prevent attackers from the Binance hack—who still hold large amounts of ETH, stablecoins, and governance tokens—from using remaining borrowing limits to establish large positions in the first few blocks after unfreezing. The adjustment will cut unused borrowing limits by roughly $3.7 billion for Aave V3 and $130 million for Aave V4. According to LlamaRisk data, Aave V3 and V4 reserves were previously frozen due to the Binance hack, with attackers having borrowed 19,762 WETH from Aave V3 Core. The adjustment targets markets where pre-hack borrowing exceeded $10 million and had more than $10 million remaining under their caps; the new cap is set at the higher of the pre-hack borrowing amount and current borrowing amount, plus a 2% increase. The adjustment covers assets including WETH, USDT, and USDC across multiple Aave V3 instances such as Core, Base, Arbitrum, and Plasma. For example, the WETH borrowing cap for Aave V3 Core will be reduced from 2.4 million to 1.79 million, and the USDT borrowing cap from 3.09 billion to 2.56 billion. LlamaRisk noted that borrowing caps can be reinstated via standard procedures later as borrowing demand recovers.