Decentralised lending platform Aave implemented governance proposal 536 on 28 October, increasing how much can be borrowed against bitcoin and ether collateral. On V3's Ethereum Core market, the loan-to-value (LTV) ratio for WBTC and cbBTC rose from 73% to 81%. On V4, factors also rose for WETH from 83% to 84%, for wstETH from 80% to 82% and for WBTC and cbBTC from 78% to 85%. The changes also cover V3 markets on the Arbitrum and Base networks, with revised liquidation thresholds.

What it means: The loan-to-value ratio determines how much someone can borrow based on the value of the collateral they deposit. An increase from 73% to 81% means that with $1,000 of bitcoin as collateral, a user can now borrow $810 instead of $730. This makes the platform more attractive for those who want liquidity without parting with their crypto, but it reduces the safety margin: a smaller price drop is now enough to trigger automatic liquidation of the position. The changes were decided through the platform's governance, based on risk analysis by specialist teams, and not by any supervisory authority, which highlights how decentralised finance differs from banks. In the EU, MiCA does not fully regulate decentralised services without an identifiable provider, an issue under discussion in its review. For Greek users who borrow through such platforms, the point is that rules can change quickly through a vote, so they should track their positions' risk parameters and avoid borrowing up to the maximum allowed.

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