Aave V3 Risk Stewards have approved reverting WETH interest rate model parameters across five markets including Core, Arbitrum, Base, Mantle, and Linea to their pre-incident levels. The emergency tightening had been applied on April 18, 2026 in response to the Kelp rsETH bridge incident, which temporarily disrupted rsETH redemptions and elevated ETH borrowing risk. With redemptions now open and the incident resolved, the emergency parameters are deemed unnecessary.
For Armada's crypto repo desk, this reversion restores more representative WETH borrowing cost signals across the major Aave markets used as rate benchmarks. Specifically, variableRateSlope2 on Arbitrum, Base, Mantle, and Linea returns to 800bps from the compressed emergency levels, reflecting normalized ETH liquidity conditions. Armada should update any ETH repo pricing models that incorporate Aave WETH rates as a reference benchmark.