Aave Freezes $98M to Abandon Six Unprofitable Chains

Woofun AI reports that Aave, the decentralized lending protocol, has submitted a proposal to abandon six blockchains: Sonic, Scroll, zkSync, Metis, Soneium, and Aptos. This strategic contraction aims to eliminate economically inefficient deployments, resulting in the freezing of approximately $98 million in user deposits across these networks. The move marks a decisive shift away from broad expansion toward a focus on high-yield infrastructure.

The financial rationale for this retreat is starkly defined by the disparity between operational costs and generated revenue. Maintaining price feeds, liquidation systems, and continuous monitoring for each market incurs fixed expenses that far exceed the income produced by these specific chains. While Aave’s Ethereum mainnet deployment generates more than $142 million a year and Base contributes about $4.7 million, the targeted networks are financially negligible. Metis produces roughly $3,000 annually, and Metis, Soneium, and Aptos each bring in under $1,000. Each of the six deployments now generates less than $5,000 a quarter, a figure insufficient to cover the baseline costs of running them.

Liquidity has evaporated rapidly across these six chains over the past six months, reinforcing the decision to withdraw. Soneium saw its deposits fall by 95%, while available liquidity on Aptos dropped 94%. zkSync experienced an 88% decline, leaving only about $844,000 in assets, and Scroll fell 86% to roughly $2 million. Metis dropped 79%, and Sonic, the largest of the group, fell 74% to just under $8 million. Combined, these six chains hold only $13 million in deposits against Aave’s roughly $14 billion across 23 chains, representing under 1% of the protocol’s total assets.

Woofun AI data shows that protocol economics further illustrate the triviality of these marginal revenues. Borrowers paid about $888 million in interest over the past year, but almost all of it flows straight back to suppliers. Aave itself kept roughly $117 million, or about 13 cents of every dollar collected, according to DefiLlama. Of the $156 million in gross revenue recorded in the second quarter, the split remains consistent. When applied to the six chains, the numbers become insignificant; each generates under $5,000 a quarter. At Aave’s usual take, the protocol’s own share of a $5,000 quarter is a few hundred dollars. On those terms, Metis is worth roughly the price of a dinner.

The urgency of this consolidation is driven by declining gross revenue and shrinking fee structures. Gross revenue dropped from $198 million in the first quarter to $156 million in the second, a decline of a fifth. Third-quarter figures, which are one month old, are running well below that pace. Liquidation fees have been the clearest casualty of this downturn, falling from $27 million in the second quarter to under $200,000 so far. This erosion in top-line growth underscores the necessity of pruning underperforming assets to preserve capital efficiency.

The exit mechanism designed by Aave avoids forcibly closing existing positions, opting instead for a structured freeze. Markets will be frozen to new deposits, borrowing, and collateral use, with supply and borrowing limits cut to a single token. To incentivize withdrawal, 99% of borrower interest will be routed to Aave’s treasury, and a 5% base borrowing rate will be introduced. This high cost is intended to make it expensive enough to stay that remaining users leave on their own, ensuring a clean and orderly decommissioning of the markets.

This proposal serves as the logical conclusion of the Aave Chan Initiative launched in December, which previously proposed rolling back deployments on zkSync, Metis, and Soneium for lacking product market fit. That initiative also established a rule requiring any future deployment to commit to at least $2 million in annual revenue. Aave has cast this cleanup as risk reduction as much as cost-cutting, targeting 21 expired Pendle principal tokens across 11 Aave deployments. By freezing $98 million in deposits, the protocol prioritizes core stability over peripheral experimentation.