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Aave plans to lower borrowing caps in key lending markets to prevent the Binance hacker from building large positions after a phased unfreezing of Aave V3 and V4, according to DeFi risk and transparency provider LlamaRisk.
LlamaRisk said on Aave’s governance forum it plans to use the Risk Steward mechanism to reduce unused borrowing capacity ahead of the phased lifting of the freeze. The move is intended to stop the attacker, who still holds sizable amounts of ETH, stablecoins and governance tokens, from using remaining borrowing headroom to build large positions immediately after the unfreezing. According to LlamaRisk, the attacker has already borrowed 19,762 WETH on Aave V3 Core.
The adjustment is expected to reduce unused borrowing capacity by about $3.7 billion on Aave V3 and about $130 million on V4. The affected markets include WETH, USDT and USDC across several Aave V3 deployments, including Core, Base, Arbitrum and Plasma. LlamaRisk added borrowing caps can be raised again through governance procedures if borrowing demand recovers.