Aave has frozen tBTC on its V3 Ethereum Core market after Threshold Network said it had pre-emptively paused tBTC mints and redeems on Oct. 31, 2026. According to Aave, the freeze was put in place to stop the protocol’s exposure to the asset from increasing while Threshold’s pause remains in effect.
The action was limited to Ethereum Core, where tBTC was still able to support new borrowing. Aave said its Base and Arbitrum tBTC reserves had already been frozen during earlier asset depreciation rounds, and that no other reserve or market was affected by the latest move.
Threshold pause prompted a rapid response
In its governance update, Aave said Threshold Network initiated the mint-and-redeem pause on Oct. 31 and that Aave is in contact with the Threshold team while monitoring further updates. The protocol described its own action as a pre-emptive measure rather than a response to a confirmed loss event on Aave.
Because tBTC is listed on Aave V3 across Ethereum Core, Base, and Arbitrum, the scope of the response depended on where the asset was still active. Aave said Ethereum Core was the only market where tBTC could still be used to support new borrowing at the time of the incident.
Freeze executed at 10:01 UTC
Aave said it prepared a freeze transaction for tBTC on Ethereum Core and submitted it to the guardian multisig, which executed the change at 10:01 UTC on Oct. 31. The stated goal was to prevent any additional protocol exposure until Threshold confirms the underlying issue has been fully mitigated.
The freeze blocks two main forms of new activity: users can no longer make new tBTC deposits into the affected reserve, and tBTC can no longer add borrowing power to a position. In practice, that means users cannot increase credit capacity on Aave by supplying more tBTC while the restriction is in place.
Existing positions continue to function
Aave said the freeze does not amount to a market-wide pause. Users are still able to repay debt and withdraw assets, while liquidations continue to operate normally. Borrowing against other collateral on the market also remains unchanged.
The protocol added that tBTC keeps its existing liquidation threshold, which means health factors for current positions do not automatically worsen as a result of the freeze alone. Aave said no position becomes liquidatable solely because the reserve was frozen.
Since frozen reserves do not accept new supply, users who want to improve a position’s safety margin during the freeze can do so by repaying debt or by adding other collateral, according to the update.
What Aave says comes next
Aave said it will keep tracking Threshold’s public updates as well as tBTC positions on the protocol and tBTC liquidity on secondary markets. The protocol indicated that any further action will depend on whether tBTC operations return to normal.
Once Aave has sufficient assurance that the issue has been resolved, it said it will propose restorative measures and publish a follow-up update in the same governance thread. For now, the confirmed status is that only the Ethereum Core tBTC reserve is frozen, while no broader Aave market has been paused.
Source: governance.aave.com