Aave Risk Manager Plans Borrowing Throttle After $44.6M Hack Loan

Aave's risk shop wants to put a speed limit on borrowing. LlamaRisk CEO Adam Sadowski said his firm is building a system that would cap how much can be pulled from the lending protocol over set windows of time, speaking on an episode of Uneasy Money recorded Nov. 4. He offered no timeline, no cap sizes and no detail on how long each period would last.

The trigger arrived six days earlier. A wallet tied to the Binance hot-wallet hack posted USDT — a stablecoin its issuer can freeze — as collateral on Aave and borrowed ether against it. LlamaRisk places that wallet in the exploiter's cluster, and Etherscan tags it a Binance hot-wallet exploiter.

The trade was fast and enormous. Per LlamaRisk's post on Aave's forum, the wallet drew 19,762 WETH, worth about $44.6 million at the time, against 60 million USDT in roughly three minutes on Oct. 29. By 16:04 UTC on Nov. 5, the position owed about 9,885 WETH against roughly 35.57 million USDT of collateral, putting the health factor near 1.24. A liquidator had already repaid about 9,884 WETH at 14:49 UTC on Nov. 4 and taken about 24.38 million USDT. Sadowski said the position has started to enter liquidation, and by Unchained's read of the health factor, ether would need to climb about 24% before another liquidation window opens.

Aave's guardians froze markets about 40 minutes after the borrow. Liquidators kept working through the freeze, and borrowers could still repay or pull collateral — only fresh deposits and new borrowing were cut off. Ethereum Core has since reopened, but USDT and USDC parked there still add zero borrowing power because their loan-to-value ratio sits at zero.

Sadowski framed the fix as a shift from people to machines. He described risk oracles that convert real-world signals into onchain actions, and argued manual signers have to make way for automation because AI agents are already scanning for exploits. He pointed to Chainlink's Runtime Environment, which lets risk managers run their own logic. LlamaRisk's risk oracle for Pendle principal tokens on Aave already runs on CRE, and the firm's governance proposal said the same setup is built to handle other oracles, supply and borrow caps among them.

Not everyone on the forum is sold. LlamaRisk's own posts in the thread never mentioned a time-based limit, though users pushed for flow limits; one, gnarvaja, flagged his April proposal for an automated supply-cap updater. Co-host Kain Warwick, the Synthetix founder, noted a per-account cap could be sidestepped by splitting a borrow across many wallets. Sadowski's answer: there's always a trade-off with risk management. Warwick shot back that the unintended consequences of changing these systems are extremely high. Sadowski's counter was that the Aave DAO controls how often a delegated operator can act and which parameters it can touch. Aave's guardians, he added, are a four-of-seven multisig, and the risk steward role is run jointly by LlamaRisk and Aave Labs.