Aave Governance has approved removing Sky’s USDS stablecoin as collateral following a Snapshot vote that passed with 99.5% support. The proposal, submitted by governance delegate ACI, argues that USDS generates negligible revenue while its issuance model introduces asymmetric risks to the protocol.
The measure recommends disabling USDS as collateral, raising its reserve factor to 25%, and removing it from the higher-efficiency “e-Mode” for correlated assets. Aave, the largest lending protocol in DeFi, currently holds $33 billion in total value locked.
A second governance process, still underway, proposes winding down Aave v3 deployments on zkSync, Metis, and Soneium. With preliminary approval at 99.9%, the proposal notes that these instances contribute just $76,000 to Aave’s annualized $175 million in revenue and account for only 0.05% of its TVL.
Source: Aave Governance / Snapshot
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