Aave Restores Borrowing Caps After Freeze, but Caps New GHO Loans

Following an emergency freeze on October 29, Aave’s risk service LlamaRisk implemented emergency borrowing‑cap cuts and temporary interest‑rate adjustments on its V3 and V4 platforms. The Core market’s GHO ceiling was reduced from 150 million to 105 million, and the Prime market’s from 85 million to 35 million, a total cut of 95 million GHO. LlamaRisk’s methodology lowered caps by roughly 2 % above the larger of pre‑exploit borrowing or borrowing at the time of observation, targeting assets with more than $10 million borrowed before the incident. The freeze had halted new supply and borrowing while allowing withdrawals, repayments and liquidations. With the caps restored, new borrowing can resume, but the lower ceilings and higher utilization rates (e.g., Core USDC at 97.8 % utilization) mean that liquidity remains tight and borrowing costs may rise. The temporary Slope2 reductions lower the steep part of the borrowing‑rate curve above the optimal utilization point, potentially easing borrowing costs for existing positions.