Aave executes long-tail reserve deprecations

What happened

Aave governance executed proposal 339 to begin or continue deprecating EURS on Polygon, SNX on Ethereum Core, and LUSD on Arbitrum and Optimism.

What changed

The payload removed collateral capacity for EURS and SNX, eliminated their debt ceilings, increased borrower base rates, and raised reserve factors intended to encourage users to exit the affected reserves.

What did not change

The reserves were not removed, existing positions were not automatically closed, and execution does not establish that every supplier or borrower exited without loss or congestion.

Confirmed

• Proposal 339 executed on July 22, 2025.
• EURS Polygon LTV was set to 0%, its debt ceiling to zero, its base rate to 2%, and its reserve factor to 50%.
• SNX Ethereum Core LTV was set to 0%, its debt ceiling to zero, its base rate to 6%, and its reserve factor to 95%.
• LUSD base rates on Arbitrum and Optimism were raised to 2% and reserve factors to 50%.
• The stated rationale included contracted liquidity, limited demand, and changing risk profiles.

Still open

• Final Risk Steward cap reductions and their effective blocks.
• Remaining supplied and borrowed balances and the pace of user exits.
• Liquidation and repayment liquidity for affected borrowers.
• Whether any integration or client position retained exposure after deprecation began.

What it means for an advisor

• Review the Aave memo and any position inventory for exposure to the affected reserves, especially Ethereum Core SNX.
• Verify remaining balances, caps, liquidity, and exit conditions before treating deprecation as complete.