What the proposal would change

TokenLogic published the package on 12 November as a direct-to-AIP proposal. The reserve factor determines how interest paid by borrowers is divided between suppliers and the DAO treasury. The proposal says the borrower’s rate would not change directly; suppliers would receive a smaller share of interest on the affected reserves, while the DAO would receive more.

The aggregate reserve factor would rise from 12.0% to 12.7% under the proposal’s 9 November snapshot. TokenLogic’s model covers V3 markets on Ethereum Core and Prime, Base, Arbitrum, Avalanche, Polygon, BNB Chain, Optimism, Gnosis, Linea, Plasma and X Layer, plus the older Ethereum V2 market. Reserves absent from the specification would keep their current settings.

Large changes concentrate in legacy and low-yield reserves

The package would move several low-utilisation bitcoin wrappers and liquid-staking assets to a 100% reserve factor. TokenLogic argues that their current supplier yields already round to, or sit close to, zero, so the projected impact on suppliers is small. The proposal would also raise LINK and ARB reserve factors to 50% on listed markets.

Stablecoin changes carry a more visible yield effect. On Avalanche V3, the proposed reserve factors are 25% for USDC and USDt and 90% for bridged DAI.e, with modeled supply-yield reductions of 61, 78 and 173 basis points respectively. On Polygon, DAI would rise from 25% to 70%, with a modeled 270-basis-point reduction. Ethereum Core DAI would move from 25% to 30%, reducing the modeled supply yield by about 17 basis points.

Plasma USDT0 would move from 5% to 7.5%, accounting for roughly $1.04 million of the annualised revenue estimate. That line is explicitly conditional: the proposal says it would enter the eventual AIP only after the relevant terms are finalised. Ethereum Core WETH is excluded pending separate coordination.

Ethereum V2 settings would approach the maximum

For Aave V2 Ethereum, the proposal would raise the reserve factors for USDC, DAI and WETH from 85% to 99.99%, and WBTC from 90% to 99.99%. The stated goal is to reduce incentives to keep liquidity in the frozen legacy market and encourage migration. A lower supplier return can encourage withdrawals, but the timing and market response would determine any effect on available liquidity.

Aave’s own FAQ defines the reserve factor as the percentage of borrower interest accumulated to the treasury, set per asset by governance. Its governance documentation describes direct-to-AIP as a faster path for eligible parameter adjustments. That label does not mean the changes are already approved or executed.

NetNapz assessment

The proposal is economically significant because it changes the distribution of interest across many markets at once. The headline revenue estimate should be treated as scenario analysis: balances, utilisation and rates can change before and after any implementation, so actual treasury receipts could differ materially.

For suppliers, the relevant question is the market-specific yield change rather than the blended reserve-factor figure. Stablecoin reserves with meaningful utilisation face the clearest modeled reductions, while low-utilisation collateral reserves may see little observable difference. Borrowers should not interpret “no direct rate change” as a guarantee that borrowing costs remain fixed: supplier withdrawals can alter utilisation, which can then affect rates through the existing interest-rate model.

No onchain AIP result, execution transaction or realised revenue from this package was verified at publication time. The next reliable checks are the final payload, any security review, the onchain vote and post-execution reserve data.