Aave executes wrsETH onboarding on Avalanche

What happened

Aave Governance V3 executed proposal 414, adding wrapped rsETH as collateral on the Avalanche instance.

What changed

wrsETH became collateral-enabled with a 5,000-unit supply cap, a capped exchange-rate oracle path, and a wrsETH/WETH E-mode allowing 93% maximum LTV and a 95% liquidation threshold.

What did not change

wrsETH was not enabled for ordinary borrowing. Execution did not approve Avalanche, Kelp DAO, LayerZero, wrsETH, or the new E-mode for Ketju clients.

Confirmed

• Proposal 414 executed on November 25, 2025.
• The wrsETH supply cap is 5,000 units.
• Base collateral parameters are 0.05% LTV and a 0.1% liquidation threshold.
• The wrsETH/WETH E-mode uses 93% LTV and a 95% liquidation threshold.
• The reserve uses a capped wrsETH/ETH/USD oracle path and is not borrowable.

Still open

• Live wrsETH liquidity, utilization, liquidation performance, and holder concentration on Avalanche.
• The continuing security of Kelp, wrapper, LayerZero, multisig, bridger-role, and oracle dependencies.
• Whether high E-mode leverage remains liquidatable during bridge, wrapper, or staking-token stress.

What it means for an advisor

• Review the Aave memo for the new cross-chain wrapper, bridge, oracle, and high-leverage E-mode dependencies.
• Keep the Avalanche reserve outside any Ethereum-only Aave approval unless separately reviewed.
• Monitor live liquidity and liquidation capacity before recognizing the reserve as advisor-accessible exposure.