LlamaRisk has recommended a 55% collateral factor and a 37,000-token cap for a proposal to use SpaceX shares as collateral on Aave. The risk assessment lands as a SpaceX share unlock approaches, a event that could test how the collateral arrangement holds up under pressure.
The proposal would let SpaceX shares back loans on the Aave lending protocol. LlamaRisk's parameters are meant to limit exposure. The 55% collateral factor sets how much borrowing power each token represents. The 37,000-token cap puts a firm ceiling on the size of the position.
What the two limits do
A 55% collateral factor means a borrower can access just over half the value of the posted collateral in loans. That buffer protects the protocol if the collateral's price falls. The 37,000-token cap limits how many tokens can enter the system, keeping the total exposure bounded no matter how much demand shows up.
Together, the two numbers define the risk envelope LlamaRisk is willing to accept. They're the core of its recommendation, and they're what Aave's governance will weigh before any SpaceX share collateral goes live.
Why the SpaceX unlock matters
The SpaceX share unlock adds a timing problem. A lockup expiry can release new shares into the market, and that can move prices. For a collateralized lending position, a price move is the whole game: it changes what the collateral is worth and whether borrowers stay safely above their loan thresholds.
LlamaRisk's recommendations don't remove that exposure. They size it. The 55% factor builds in a margin, and the token cap prevents the position from growing so large that a single price swing becomes unmanageable.
Where bigger liquidations could come from
LlamaRisk's assessment points to redemptions and derivatives hedges as the channels through which larger liquidations could occur. If holders redeem tokens or hedge their exposure with derivatives, the collateral pool can shift in ways that put more pressure on the system than a simple price drop would.
That's a different risk from the unlock itself. The unlock is a known date. Redemptions and hedges are choices holders make, and they can bunch up around the same event. The recommended cap and collateral factor are the tools LlamaRisk has proposed to keep that bunching from turning into a liquidation cascade.
What governance is weighing
Aave's governance now has a set of specific numbers to consider: 55% and 37,000. Those aren't abstract. They decide how much borrowing the SpaceX share collateral can support and how much of the token can exist at all. A higher collateral factor would make the position more attractive to borrowers and riskier for the protocol. A lower cap would shrink the experiment.
The SpaceX unlock is the clock running in the background. The proposal's parameters will be judged against how the market behaves when that unlock hits.
No date has been set for a governance vote on the recommendation. Until one is, the 55% collateral factor and the 37,000-token cap remain LlamaRisk's proposal, not Aave's policy.
