Aave's guardian multisig froze the tBTC reserve on its V3 Ethereum Core market after Threshold paused minting and Bitcoin redemption requests. The freeze blocks new deposits and additional borrowing against the token, while repayments, withdrawals and liquidations continue.
Aave's guardian multisig froze the tBTC reserve on its V3 Ethereum Core market on Oct. 31, blocking new deposits and additional borrowing against the token. The move followed Threshold's decision to pause minting and Bitcoin redemption requests.
Aave risk service provider LlamaRisk said it prepared the transaction to stop exposure to tBTC from growing during the pause. The onchain transaction executed at 6:01 a.m. ET, setting the reserve's standard maximum loan-to-value ratio to zero and leaving its liquidation threshold at 78%.
What the freeze means for borrowers
Aave's interface showed roughly 1,770 tBTC supplied, worth about $136.5 million. Existing borrowers face no immediate change, because the freeze itself does not alter position health factors or trigger liquidations, LlamaRisk said.
Borrowing against other collateral remains available. Users who want to improve their health factors can repay debt or add other collateral, but they cannot deposit more tBTC while the freeze lasts.
The action affects only tBTC on Ethereum Core, not other reserves or the market as a whole. According to LlamaRisk, Aave's tBTC reserves on Base and Arbitrum were already frozen in earlier deprecation rounds.
Threshold cites security maintenance
In its Oct. 30 notice, Threshold said it paused new BTC deposits, tBTC minting and new Bitcoin redemption requests through its app as a precaution while security maintenance is completed. Pending redemptions may still be paid on Bitcoin, but final settlement on Ethereum is paused and some transactions may be delayed, Threshold said.
Holding, transferring and using tBTC remain unaffected by Threshold's pause. Threshold also warned users not to send BTC to previously generated deposit addresses or try new minting or redemption operations through alternative interfaces.
LlamaRisk said it will monitor tBTC positions and secondary-market liquidity. It will propose restorative measures once it has assurance that tBTC operations have returned to normal.
Source: The Defiant
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