Risk Stewards: IRM Changes on Aave V3 / 2026.05.18

Summary LlamaRisk recommends reverting WETH interest-rate-model parameters on Aave V3 to their pre-incident configuration across the five markets that were tightened in response to the Apr 18, 2026 Kelp rsETH bridge incident. With rsETH redemptions open, the emergency rate adjustments are no longer required. Aave V3 Core: Restore WETH optimalUsageRatio from 9400 to 9200, variableRateSlope1 from 200 to 235, variableRateSlope2 from 300 to 600 (BPS). Aave V3 Arbitrum: Restore WETH variableRateSlope1 from 150 to 250, variableRateSlope2 from 150 to 800 (BPS). Aave V3 Base: Restore WETH variableRateSlope1 from 150 to 250, variableRateSlope2 from 150 to 800 (BPS). Aave V3 Mantle: Restore WETH variableRateSlope1 from 150 to 250, variableRateSlope2 from 150 to 800 (BPS). Aave V3 Linea: Restore WETH variableRateSlope1 from 150 to 250, variableRateSlope2 from 150 to 600 (BPS). WETH (Aave V3 Core) The proposed change restores optimalUsageRatio to 92.00%, variableRateSlope1 to 2.35%, and variableRateSlope2 to 6.00%, matching the parameters in effect immediately before the Apr 18, 2026 incident. At the current 87.7% utilization, the post-change variable borrow rate would be 2.24% APY, up from 1.87% under the current IRM. Source: LlamaRisk, May 18, 2026 WETH (Aave V3 Arbitrum) The proposed change restores variableRateSlope1 to 2.50% and variableRateSlope2 to 8.00%. optimalUsageRatio and baseVariableBorrowRate are unchanged. At the current 65.6% utilization, the post-change variable borrow rate would be 1.78% APY, up from 1.07% under the current IRM. Source: LlamaRisk, May 18, 2026 WETH (Aave V3 Base) The proposed change restores variableRateSlope1 to 2.50% and variableRateSlope2 to 8.00%. optimalUsageRatio and baseVariableBorrowRate are unchanged. At the current 78.6% utilization, the post-change variable borrow rate would be 2.18% APY, up from 1.31% under the current IRM. Source: LlamaRisk, May 18, 2026 WETH (Aave V3 Mantle) The proposed change restores variableRateSlope1 to 2.50% and variableRateSlope2 to 8.00%. optimalUsageRatio and baseVariableBorrowRate are unchanged. At the current 100.00% utilization, the post-change variable borrow rate would be 10.50% APY, up from 3.00% under the current IRM. The reserve is at the slope2 ceiling so the proposed change passes through the slope2 delta in full. Now that rsETH redemptions are open, the high borrow and supply rates will help to rapidly stabilize the market by attracting new deposits while also prompting repayments. Due to the conservative health factors, the risk of liquidations is limited. Source: LlamaRisk, May 18, 2026 WETH (Aave V3 Linea) The proposed change restores variableRateSlope1 to 2.50% and variableRateSlope2 to 6.00%. optimalUsageRatio and baseVariableBorrowRate are unchanged. At the current 67.7% utilization, the post-change variable borrow rate would be 1.88% APY, up from 1.13% under the current IRM. Source: LlamaRisk, May 18, 2026 Specification Instance Asset Current Optimal Usage Ratio Recommended Optimal Usage Ratio Current Base Variable Rate Recommended Base Variable Rate Current Slope 1 Recommended Slope 1 Current Slope 2 Recommended Slope 2 Aave V3 Core WETH 94.00% 92.00% 0.00% — 2.00% 2.35% 3.00% 6.00% Aave V3 Arbitrum WETH 92.00% — 0.00% — 1.50% 2.50% 1.50% 8.00% Aave V3 Base WETH 90.00% — 0.00% — 1.50% 2.50% 1.50% 8.00% Aave V3 Mantle WETH 90.00% — 0.00% — 1.50% 2.50% 1.50% 8.00% Aave V3 Linea WETH 90.00% — 0.00% — 1.50% 2.50% 1.50% 6.00% Next Steps We will move forward and implement these updates via the Risk Steward process. Disclosure This review was independently prepared by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work. The information provided should not be construed as legal, financial, tax, or professional advice. 1 post - 1 participant Read full topic