TLDR
- Aave restored WETH LTVs across six V3 markets under its rsETH technical recovery plan today.
- The update covers Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle, and Linea Aave markets deployments.
- Users can now again borrow against WETH, including via collateral swaps and debt swap functions.
- Risk teams had reduced WETH LTVs after rsETH exposure raised concerns around leveraged loops earlier.
- Aave did not publish each chain’s new WETH LTV numbers in the public announcement post.
Aave has restored WETH loan-to-value ratios across six affected Aave V3 markets. The move lets users borrow against WETH again under earlier limits.
The update forms part of the rsETH technical recovery plan. Aave founder Stani Kulechov said it “marks the next phase of the rsETH technical recovery plan.”
Aave Restores WETH LTVs Across Six Markets
Aave V3 restored WETH LTV ratios to pre-incident levels on May 17, 2026. The change covers Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle, and Linea.
WETH LTV sets how much users can borrow against WETH collateral. When the ratio rises, users can borrow more against the same WETH position.
The update also affects collateral swap and debt swap functions. These tools help users adjust positions without closing their full loans.
Aave confirmed the rollback through its main account. The post did not list every new per-market value.
Why Aave Cut WETH Borrowing Limits
Aave reduced WETH LTVs after the KelpDAO incident linked to rsETH collateral. The move aimed to limit risk across markets with related exposure.
The incident reportedly drained about $290 million in rsETH-linked collateral. After that event, Aave and risk teams reviewed affected markets.
The WETH LTV cut reduced leverage in recursive borrowing strategies. These strategies often depend on borrowing near the maximum loan limit.
The step was broad, but it slowed risk during the review period. It also gave service providers time to assess rsETH-linked exposure.
rsETH Recovery Plan Moves Into Next Phase
The recovery plan includes repayment work for affected rsETH holders. KelpDAO has led that process with support from related service providers.
Aave also reviewed markets that listed rsETH or used it through linked positions. The review focused on risk settings, liquidity, and collateral behavior.
The WETH LTV restoration shows that Aave now treats that risk channel as contained. However, some rsETH-specific limits may still remain tighter.
Aave has not said that all rsETH settings returned to old levels. Market watchers now track supply caps and peg stability.
Users Can Borrow Against WETH Again
Users can again borrow against WETH under the earlier Aave V3 ratios. This change may help traders who use ETH-based collateral strategies.
Existing positions near the temporary cap may now have more room. Still, liquidation rules, oracle prices, and market rates continue to apply.
The update comes while crypto markets remain under pressure. The provided market data shows Bitcoin near $78,104 and ETH near $2,183 on May 17, 2026.
For Aave, the change is a measured step in the rsETH recovery plan. It restores WETH borrowing settings without removing all rsETH safeguards.
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