Aave Weighs Freezing $279M in osETH; StakeWise Seeks Separate Vote

Risk adviser LlamaRisk proposed on Nov. 10 to freeze five assets in Aave V3 Core, including StakeWise's liquid staking token osETH. CryptoSlate puts the osETH collateral at about $279 million. StakeWise's founder asked on Nov. 11 for a separate vote on his token, and Rocket Pool made the same request for rETH on Nov. 12. Nothing has been decided: this is a discussion on Aave's governance forum, not a final vote.

Details

In its forum proposal, LlamaRisk wants V3 Core to keep only liquid, established collateral and move the rest to Aave V4. The list covers rsETH, osETH, LBTC, tBTC and rETH. As of Nov. 9, those assets held $1.33 billion in collateral backing $1.03 billion in debt.

The first step is a freeze: no new supply, LTV set to zero, existing positions left untouched. Where an asset carries more than $20,000 of debt, the reserve factor goes to 99%. An "orderly migration" with issuers and the largest borrowers follows. Stepwise cuts to liquidation thresholds and rate changes would apply only where positions do not leave within a few months.

According to CryptoSlate, the $279.4 million of osETH backs roughly $256.6 million in WETH debt, with positions running about 14x leverage in Aave's ETH-correlated E-Mode. The ten largest positions account for 66% of that debt. These figures come from the article and are not in the forum post.

In a forum reply, StakeWise's founder says the protocol has run since January 2021 with no hacks or validator slashings, and that osETH has served as Aave collateral for about 2.5 years. He asks for a separate vote so the token can be assessed against the Aave Risk Framework. Rocket Pool's general manager asks for the same for rETH, which he says backs about $82 million across 317 positions.

What it means for the market

A freeze does not force positions closed, but it stops these assets from growing on the largest DeFi lender. If it passes, leveraged borrowers would have to move to other collateral such as wstETH, which could affect demand for liquid staking tokens. The sources give no voting dates. Follow Aave's forum and CoinLab's Ethereum page.