Aave founder proposes risk framework on June 9 after KelpDAO exploit

Stani Kulechov, founder of the Aave lending protocol, proposed a new risk framework on June 9 that would apply across all protocol markets and assets after the KelpDAO exploit.

"The framework will be applied across all markets and assets once the proposal passes," Kulechov said in a governance post.

The KelpDAO exploit, which targeted vulnerabilities in DeFi lending risk parameters, prompted the proposal. Aave v3 currently generates over $100 million in annual revenue, according to Aave Labs' recent governance filings, making risk management a priority as the protocol prepares for its v4 upgrade. The proposal follows months of governance tension between Aave Labs and the Aave DAO over revenue allocation and protocol direction.

The new framework could tighten lending and borrowing conditions across Aave's markets, potentially reducing risk exposure while limiting capital efficiency. The governance vote timeline has not yet been disclosed, though the proposal points to stricter collateral requirements as DeFi protocols face increased scrutiny after the exploit. Aave's total value locked across all deployments stood at over $15 billion as of early June, according to DefiLlama data, making any parameter changes consequential for the broader DeFi lending market.

This article is for informational purposes only and does not constitute investment advice.