# Aave approves stS collateral parameters for its Sonic market

> The proposal advanced to the AIP stage with concrete collateral, liquidation, cap, oracle, and E-mode parameters. If executed, it would introduce a slashable liquid-staking-token dependency and enable leveraged stS/wS positions.

- URL: https://riadefi.com/on-chain/2025-04-14-aave-v3-sonic-sts-collateral-arfc-approval/
- Type: Economic change
- Stage: Approved, not executed
- Evidence: confirmed
- Materiality: material
- Event date: 2025-04-14
- Version: 1, published 2026-08-22 (first published 2026-08-22)
- Follow-up: 2025-04-30
- Advisor-relevant: no
- Affects: Aave v3 (protocol)

## What happened

Aave's ARFC Snapshot approved advancing stS as collateral on Aave V3 Sonic, with a 30 million stS supply cap, CAPO pricing, and a high-efficiency stS/wS E-mode configuration.

## What changed

The proposal advanced to the AIP stage with concrete collateral, liquidation, cap, oracle, and E-mode parameters. If executed, it would introduce a slashable liquid-staking-token dependency and enable leveraged stS/wS positions.

## What did not change

The ARFC approval did not list stS on-chain or make the reserve live. It did not change Ketju's approved Aave exposure or establish stS as client-appropriate.

## Confirmed

- The ARFC vote passed on April 14 with quorum and YAE as the winning option.
- The proposed regular-mode stS LTV and liquidation threshold were 66% and 68%.
- The proposed stS/wS liquid E-mode LTV and liquidation threshold were 87% and 90%.
- The proposal specified a 30 million stS supply cap and CAPO pricing based on the stS exchange rate and S price feed.

## Still open

- The final AIP payload, vote, and execution date.
- Live oracle, CAPO, liquidity, liquidation, slashing, and 14-day native-unbonding performance after onboarding.
- Whether proposed liquidity commitments materialized.
- Whether stS concentration or validator exposure changed before execution.

## What it means for an advisor

- Review Aave's Sonic collateral and liquidation dependency map before any stS reserve is treated as acceptable.
- Monitor the AIP and verify executed parameters, oracle configuration, caps, and live exit liquidity.
- Do not extend Ketju approval from the watched Aave protocol to stS or leveraged Sonic strategies.

## Sources

1. [[ARFC] Add stS to Aave v3 Sonic Instance](https://governance.aave.com/t/arfc-add-sts-to-aave-v3-sonic-instance/21445) · Aave Governance Forum · 2025-03-15


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.