Aave has restored ether borrowing limits across six networks, reversing restrictions imposed after a $230 million exploit. The move signals that contagion fears are fading in the decentralized finance sector, where lenders had tightened terms following a separate $292 million attack in April.
Why the limits were cut
After the $292 million exploit in April, Aave slashed borrowing caps on ether to limit potential losses from cascading liquidations. The decision affected users across multiple blockchain networks, restricting how much ETH they could borrow against collateral. At the time, the broader defi market was on edge, worried that a single hack could trigger a domino effect of defaults.
The $230M exploit and its aftermath
The more recent $230 million exploit compounded those fears, even though Aave itself was not directly compromised. The attack targeted a protocol that relied on Aave’s liquidity, forcing the platform to reassess risk exposure. Borrowing limits remained tight for weeks as the team monitored for signs of instability.
Restoration across six networks
Now Aave has lifted those caps on all six networks where ether borrowing was curbed. The restoration means users can again borrow ETH at normal collateral ratios. The company’s risk management team determined that the worst-case scenarios tied to the exploits have not materialized, allowing them to reopen access without added safeguards.
Contagion fears receding
The decision comes as anxiety over broader defi contagion begins to subside. In the weeks following the $230 million attack, some lenders had pulled back from the market, worried that a string of hacks might drain liquidity pools. But with Aave’s move, confidence appears to be returning. No further restrictions are expected unless new vulnerabilities emerge.
