Aave to Adjust Its Multi-Chain Strategy

Aave, one of the largest decentralized lending protocols in DeFi, is preparing to dial back its aggressive multi-chain footprint and refocus on a tighter set of high-performing networks. A new governance proposal before the Aave DAO outlines a plan to deprecate certain V3 deployments on underused chains while tightening criteria for any future expansions. The shift reflects a more disciplined approach to capital efficiency, risk management, and operational overhead as DeFi matures beyond its “expand everywhere” phase.

Pulling Back From Low-Revenue Networks

Under the proposal, Aave’s V3 instances on low-activity chains would be gradually wound down, with incentives removed and new borrowing or supply restricted over time. Liquidity providers on those networks would be encouraged to migrate back to core environments such as ETH mainnet, Arbitrum, Optimism, and Polygon, where usage, fee revenue, and security assumptions are stronger. The plan also contemplates adjusting reserve factors and risk parameters to prioritize markets that generate meaningful protocol income relative to the cost and complexity of maintaining them.

The earlier multi-chain strategy that defined DeFi’s 2021–2023 expansion delivered impressive reach but created new challenges. Spreading liquidity across too many chains led to fragmented markets, thinner order books, and higher maintenance burden for protocol developers, risk managers, and auditors. For Aave, each new chain required separate oracle integrations, bespoke risk assessments, governance oversight, and incident response plans. In ecosystems with limited user activity or TVL, those fixed costs often outweighed the benefits of incremental liquidity.

By consolidating around high-volume, high-fee deployments, Aave aims to improve capital efficiency for depositors and the protocol treasury alike. Concentrated liquidity typically leads to tighter spreads, deeper markets, and more predictable usage metrics. This, in turn, supports sustainable fee generation, which is critical for the long-term health of the DAO, the securety module, and any future tokenholder incentive programs tied to protocol revenue.

Refocusing on High-Liquidity, High-Revenue Deployments

Risk management is another major driver behind the strategy adjustment. Not all chains are equal in terms of security, tooling, or resilience to outages and bridge risks. Reducing exposure to experimental or lower-infrastructure networks lowers the probability that bugs, consensus failures, or cross-chain bridge exploits spill over into Aave’s core money markets. A more selective deployment framework allows the DAO to focus audit and monitoring resources where they matter most and where the economic payoff is clearest.

For users, the changes may require some migrations but should ultimately improve everyday experience. Borrowers and lenders will find deeper liquidity and more stable interest rates on the remaining networks, while integrators such as aggregators, wallets, and yield vaults can build on Aave with greater confidence in long-term support on those chains. A more concentrated footprint can also simplify user education, documentation, and tooling, reducing confusion about which deployments are actively maintained.

The proposal does not permanently close the door to future expansions. Instead, it sets a higher bar: new chains will need to demonstrate strong user demand, credible security, and a realistic path to sustainable revenue before being considered. If approved, Aave’s pivot could influence DeFi more broadly. Many protocols have already begun to realize that “multi-chain maximalism” is expensive and risky, and are leaning toward a “few chains, done well” model. Aave’s high-profile adjustment may accelerate that trend, signaling that in the next phase of DeFi, the quality and depth of deployments will matter far more than raw chain count.