Aave confirmed WETH borrowing power was restored across six V3 markets

Aave confirmed on May 17, 2026, that loan-to-value ratios for wrapped Ether had been restored to their pre-incident settings across six affected Aave V3 markets. The change reopened the ability to borrow against WETH on Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle and Linea, including through collateral and debt swaps.

The confirmation marked an important operational step in Aave’s response to the April 18, 2026, rsETH incident. It did not mean every part of the recovery was complete. Rather, Aave governance had determined that one broad precaution—temporarily reducing WETH’s borrowing power—could be reversed while safeguards specific to rsETH and wrsETH remained a separate matter.

What changed across the markets

Aave’s governance specification called for WETH’s base loan-to-value ratio to return from 0% to 80.5% on Ethereum Core, 84% on Ethereum Prime, 80% on Arbitrum, 80% on Base, 80.5% on Mantle and 80% on Linea. The proposal also removed the WETH zero-LTV flag within eligible efficiency-mode configurations, restoring effective E-Mode LTVs of 93% on Ethereum Core and Arbitrum and 90% on Base.

Loan-to-value is the maximum debt value a protocol permits against collateral before considering other restrictions. As a simplified calculation, an 80% LTV permits up to $80 of debt against $100 of collateral value. That illustration is not a statement about any user’s position: liquidation thresholds, asset prices, available liquidity, interest rates, caps and account-specific health factors still constrain actual borrowing.

Aave’s technical review of governance proposal 482 said the submitted payloads matched the stated parameter changes across the targeted deployments. The review also reported that the proposal included tests and that its execution had been validated through the protocol’s governance-review tooling.

Why the restoration mattered

Setting WETH’s LTV to zero did not erase deposited collateral or automatically liquidate every WETH supplier. It prevented the affected WETH from supporting new borrowing capacity, a deliberately conservative response while contributors assessed the consequences of unbacked rsETH entering lending markets.

Restoring the ratios therefore reopened a core function of Aave’s Ether-denominated credit markets. WETH is a standard representation of ether used by smart contracts, and its collateral settings influence borrowing, refinancing and position-management activity across multiple deployments. Reversing an emergency restriction across six markets also demonstrated how a multichain lending protocol could use guardian actions and governance payloads in sequence: first limit exposure, then restore parameters after a documented risk review.

That institutional signal should be read narrowly. The May 17 action established that Aave had restored specified WETH parameters. It did not establish that bridge risk had disappeared, that rsETH was fully normalized, that all losses had been resolved or that collateral values could not fall.

What remained uncertain on May 17

The governance advisory reported that Aave and Compound liquidations had recovered 106,993 rsETH—89,567 through Aave and 17,426 through Compound—out of an estimated 112,103 rsETH of unbacked supply on affected layer-2 networks. The same record separately described approximately 5,211 rsETH as remaining. Those published figures do not reconcile exactly through subtraction, so they should be treated as contemporaneous estimates rather than a complete audited accounting.

The advisory also made its recommendation contingent on the recovery continuing as planned and on committed funds being deployed to address residual deficits. Consequently, the May 17 restoration was a significant return of WETH market functionality, not a final declaration that every technical, financial or legal issue arising from the rsETH incident had closed.