- Aave governance has voted to remove Sky’s USDS stablecoin as collateral on its platform.
- The removal passed with 99.5% approval due to negligible revenue and potential risks associated with USDS.
- A separate vote is underway to shut down low-revenue Aave v3 instances on three blockchain networks.
- These three chains contribute only $76,000 in annualized revenue, representing 0.05% of total value locked (TVL).
- Conflicts emerged between two Solana-based lending platforms over user access and migration tools.
Aave, the leading decentralized finance (DeFi) lending protocol, plans to remove Sky’s USDS stablecoin as acceptable collateral following a governance vote. This decision was made through a Snapshot vote, with overwhelming support, citing low revenue generation and asymmetric risk concerns related to USDS’s issuance model.
The proposal, initiated by delegation ACI, passed with 99.5% approval. It calls for disabling USDS as collateral, increasing its reserve factor—the portion of borrower interest paid to Aave’s treasury—to 25%, and excluding USDS from Aave’s “e-Mode,” a feature that offers higher efficiency for correlated assets. Sky, formerly associated with MakerDAO, issues USDS and previously issued DAI, which may face similar scrutiny, as indicated by the governance process. According to a Statement by Marc Zeller, DAI is expected to follow.
A second ongoing vote aims to streamline Aave v3 deployments by phasing out those on zkSync, Metis, and Soneum blockchains. These instances collectively contribute just $76,000 in annualized revenue against Aave v3’s total revenue of $175 million, covering only 0.05% of the platform’s TVL. The proposal suggests concentrating resources on more profitable chains and increasing reserve factors on underperforming instances to cover their costs and risks. For future launches, a suggested minimum annual revenue threshold is $2 million. Details of this proposal are available here.
Separately, tension arose between two Solana-based lending platforms, Kamino and Jupiter Lend. Kamino reportedly blocked user access via Jupiter Lend’s refinancing tool, which a developer described as conflicting with open-finance principles. A detailed tweet by prady criticized Kamino for restricting migrations while advocating transparency. However, another Solana developer pointed out that Jupiter Lend’s closed-source nature and upgradeability through multisig control mean both platforms can alter their access rules, with Kamino’s transparency placing it closer to open finance norms, as noted here.
Aave remains the largest DeFi lending protocol with $33 billion in total value locked, while Sky’s stablecoins face heightened scrutiny within decentralized governance. The community continues to assess risk, efficiency, and revenue optimization across multi-chain deployments and asset support.
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