Aave proposes raising [ticker ETH] and [ticker BTC] collateral limits

The primary ARFC, published September 16, 2026, proposes raising loan-to-value and liquidation-threshold limits for major EETH$2,405.16▼3.01% and BBTC$75,923.00▼1.33% collateral families across three Aave V3 deployments and the Aave V4 Ethereum Main Spoke. Borrow more against the same stack. The catch is a narrower price gap between a fully loaded position and the protocol moving on your collateral.

On Aave V3 Ethereum Core, Base, and Arbitrum, WETH would move to 81% LTV and 84% LT. Ethereum Core picks up two more changes — wstETH rising to 79% LTV and 82% LT, and weETH to 78% LTV and 81% LT.

BTC-linked collateral follows the same direction. WBTC would go to 81% LTV and 85% LT on Ethereum Core, and 78% LTV and 82% LT on Arbitrum. cbBTC would land at 81% LTV and 85% LT on Ethereum Core, and 81% LTV and 84% LT on Base — that Base configuration also pulls the liquidation bonus down to 6.00% and pushes the Base cbBTC Stablecoins E-Mode to 82% LTV and 85% LT.

On the V4 Ethereum Main Spoke, proposed collateral factors are 84% for WETH, 82% for wstETH, 81% for weETH, and 85% for both WBTC and cbBTC.

The proposal reports ETH’s two-year annualized volatility at 68.8% against 44.4% for BTC — a 24.4-percentage-point gap. One-hour p99.9 downside excursions are 11.85% for ETH and 5.09% for BTC on the binding leg. These figures provide risk context for the proposed parameters across both asset families.

A higher LTV means more borrowing power against a fixed collateral balance, and a higher LT shifts the liquidation boundary upward with it, so a position already near its ceiling has less price distance to travel before seizure begins.

The proposal’s strongest argument is the liquidation track record. August 2025 through August 2026: Ethereum Core ETH liquidations ran a weighted median processing time under one second, a weighted p99 of five minutes, 0.00% of value falling below price over one hour. BTC matched on median and p99, with 0.07% of value below price over that same window.

Two stress periods fill out the picture. February 2 through 4, 2025 produced 936 liquidations on Ethereum Core, $172 million seized, median lag 24 seconds, 95% of volume processed within a minute — and that window closed without a recognized deficit. October 10 through 12, 2025: 430 liquidations, $100 million seized, 36-second median, 63% within a minute. Across both windows, liquidations exceeding five minutes accounted for 11.1% of events but just 0.23% of seized volume on Ethereum Core.

The more interesting risk signal isn’t slow liquidations. During February 2025, 32% of liquidated users across all deployments were hit more than once — and that group accounted for 64% of all seized volume, indicating where seized volume was concentrated among repeat-liquidated users.

Under the changes as written, WETH, wstETH, weETH, WBTC, and cbBTC holders who borrow against their positions would gain capacity — and anyone already operating near the proposed ceilings gains that capacity while sitting on less buffer if the market moves against them.