The zero loan-to-value ratio blocks borrowing against the assets, not borrowing the assets themselves. Users can again supply, withdraw, borrow and repay the listed tokens, LlamaRisk said, but the tokens cannot contribute new borrowing power as collateral.
What Reopening Means for Borrowers
For V3 borrowers, the zero-LTV restriction leaves existing liquidation thresholds unchanged, so it does not itself change their health factors, the measure of a position’s cushion against liquidation. V4 borrowers retain their existing collateral configuration until certain interactions move them to the new zero-collateral-factor configuration, LlamaRisk said.
LlamaRisk said the rollback restores LTVs for most V3 reserves while retaining the nine-asset exclusion. The reopening covers the markets in its freeze response:
– **V3:** Ethereum Core and Prime, plus Arbitrum, Avalanche, Base, BNB Chain, Celo, Gnosis, Ink, Linea, Mantle, MegaETH, Monad, Optimism, Plasma, Polygon and X Layer. – **V4:** The main Ethereum spokes, Avalanche spokes, Base tokenized-equities spoke and Arc spokes.
The permissioned Horizon RWA market had remained open, LlamaRisk said.
Why Aave Froze Markets
LlamaRisk reported that a wallet in the exploiter’s cluster supplied 60 million $USDT on Aave V3 Ethereum Core on Oct. 29 and borrowed 19,762 WETH, worth about $44.6 million at the time. It described that position as overcollateralized and subject to normal liquidation.
The risk provider said it opted for a broad freeze because the exploiter could swap funds into any listed asset. The freeze blocked new deposits and borrows, but withdrawals, repayments and liquidations continued. Aave said its contracts were unaffected and positions remained fully collateralized.
Reopening does not restore all previous borrowing headroom. LlamaRisk said it executed borrow- and draw-cap reductions that removed about $3.7 billion of unused borrowing capacity on V3 and $130 million on V4 before markets reopened.
LlamaRisk said it will evaluate and publish the conditions for restoring collateral borrowing power to the restricted assets while continuing to monitor the exploiter’s wallets and Aave’s price feeds.
