Aave Proposes Higher Bitcoin LTV as Liquidation Cushion Shrinks
Aave (AAVE)
Editor:
Eugene Serbin
Cvj.ai reports that Aave governance is advancing a LlamaRisk proposal to increase Bitcoin-backed borrowing limits on Aave V3 Ethereum Core. The plan would raise the maximum loan-to-value from 73% to 81% and the liquidation threshold from 78% to 85%. This adjustment allows users to borrow up to $0.81 against each dollar of WBTC or cbBTC collateral, up from the current $0.73.
The vote advanced to Snapshot on September 21, with results expected within 24 hours. However, the core trade-off is a shrinkage of the collateral-price cushion from about 6.4% to 4.7% at maximum leverage. A maximally leveraged position could reach liquidation after an approximate 4.7% decline in Bitcoin’s price.
LlamaRisk’s analysis of one year of data showed that 100% of seized volume cleared within five minutes of feed publication during stress windows. The proposal also modifies limits on Arbitrum WBTC, Base cbBTC, and several Ethereum Core assets.
How the market reacted
Whalio's own Binance spot order flow for AAVE, measured when this story was written up on 22 September 2026. Not the outlet's figures.
Whalio spot data for Aave shows a price of $145.90 with a 24-hour buy ratio of 52.6%. Short-term pressure appears mixed, as the 1-hour buy ratio sits at 57.6% while the 4-hour ratio drops to 48.0%. Volume delta reflects this shift, showing positive inflows of $88,972 in the last hour but negative outflows of $114,945 over four hours. The buy ratio indicates the percentage of volume driven by market buyers, while volume delta measures the net difference between buy and sell volume. Despite the 24-hour net positive delta of $1,531,281, the fading 4-hour momentum suggests buying pressure is not consistently building across all timeframes.
The latest daily buy ratio of 49.4% sits at the 46th percentile of the last 323 days, against a median of 49.8% - ordinary for this coin.
Was that an ordinary day?
The same Binance spot measurements for AAVE, averaged over the days leading up to the story.
Over the preceding week, Aave traded with a 7-day average buy ratio of 50.2%, making today’s 24-hour reading of 52.6% an unusual day by 2.3 percentage points. Trading activity was also elevated, with spot volume reaching 1.73 times the weekly average. This surge contributed to an 8-day price increase of 13.8% and a total volume delta of $3,004,825. While today’s volume is high relative to the norm, the short-term 4-hour buy ratio of 48.0% indicates a pullback from the weekly average trend. The coin has seen three days of net buying in the last seven, highlighting a period of generally positive but fluctuating sentiment.