On October 30, 2026, Aave resumed lending operations across V3 and V4 following a temporary freeze caused by a $6.3 billion Binance exploit. To protect protocol solvency after the hacker used stolen funds to borrow $44.6 million in WETH, risk provider LlamaRisk eliminated over $3.8 billion in unused borrowing capacity and set zero loan-to-value limits on nine major assets, including USDT and USDC. Slope2 interest-rate adjustments were also implemented to protect borrowers as stablecoin pool utilization reached up to 100%.
Aave market restoration waves
- ▪Aave guardians restored V3 and V4 market operations in four waves
- ▪LlamaRisk reported that only the Aave V4 collateral-configuration wave of Aave's four-wave rollback plan was explicitly marked as executed by 13:49 UTC on October 30, 2026
Zero collateral restrictions applied
- ▪Aave's zero collateral restrictions imposed after the $6.3 billion Binance hack prevent restricted assets from backing new loans while allowing existing V3 positions to retain their health scores and liquidation thresholds
- ▪Aave set a zero loan-to-value ratio on V3 and zero collateral factor on V4 for nine assets including USDT, USDC, USDT0, POL, WAVAX, sAVAX, XAUt, PAXG, and OP, following the Binance hack
Borrowing capacity and cap reductions
- ▪Queued GHO borrow-cap reductions on Aave cut Core market ceilings from 150 million to 105 million GHO and Prime market ceilings from 85 million to 35 million GHO
- ▪LlamaRisk executed lower borrowing ceilings on Aave V3 and V4, eliminating approximately $3.7 billion of unused borrowing capacity on V3 and $130 million on V4
Interest rate adjustments by LlamaRisk
- ▪LlamaRisk reduced Slope2 borrowing-rate parameters on Aave to flatten the upper interest-rate curve and protect borrowers from escalating rates during deposits blocked by the Binance hack
- ▪LlamaRisk's modeled full-utilization borrowing interest rate ceilings listed 20% for Core DAI, 34% for Core USDtb, 25% for Monad mUSD, and 19% for Ethereum Core frxUSD
Stablecoin pool utilization and borrowing
- ▪Core USDC borrowing fell below levels before the Binance hack exploit by October 30, 2026, leaving its listed cap approximately 248.4 million USDC above current debt
- ▪During Aave's freeze triggered by the Binance hack starting October 29, 2026, blocked deposits and ongoing supplier withdrawals drove utilization in major stablecoin pools to 92–100%
Binance hacker's Aave position
- ▪LlamaRisk reported on October 30, 2026, that the Aave position of the hacker behind the $6.3 billion Binance exploit remained overcollateralized with $59.9 million in assets against $43.8 million in debt
- ▪A wallet associated with the hacker behind the $6.3 billion Binance exploit deposited 60 million USDT into Aave V3 Ethereum Core to borrow 19,762 WETH
Binance exploit losses and response
- ▪Binance promised to cover user losses from the Binance hack using its SAFU reserve and corporate funds, according to its October 30, 2026 statement
- ▪Elliptic analysis on October 30, 2026, estimated total losses from the October 29, 2026 Binance exploit at $6.43 billion, while Binance stated on-chain freezes affected approximately $3 billion
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