Aave Proposes Shutting Down Three Underperforming Layer 2 Networks: A Strategic Shift in DeFi Deployment

The Challenge of Managing Multiple Blockchain Deployments

In the fast-paced world of decentralized finance (DeFi), sometimes less is more. Aave, the heavyweight champion of decentralized lending platforms with an impressive $29 billion in total value locked, is learning this lesson the hard way. The platform has come to a crossroads where it must decide which of its numerous blockchain deployments are worth maintaining and which are simply draining resources without delivering meaningful value. The Aave Chan Initiative (ACI), a governance delegation platform that helps guide Aave’s strategic decisions, has put forward a proposal that might seem counterintuitive in an industry obsessed with expansion: they want to shut down three of their Layer 2 network deployments. Specifically, the proposal targets Aave V3’s presence on zkSync Era, Metis, and Soneium—three Ethereum Layer 2 scaling solutions that have failed to generate significant user activity or revenue. This move represents a broader trend in the crypto industry where projects are beginning to realize that being everywhere doesn’t necessarily mean being successful everywhere. The proposal, which was formally introduced on January 29 and moved to a snapshot vote on February 3, reflects a more mature approach to blockchain deployment that prioritizes quality over quantity and sustainable growth over unbridled expansion.

The Numbers Tell a Sobering Story

When you look at the cold, hard data, the case for shutting down these three deployments becomes crystal clear. Despite maintaining operational infrastructure across multiple networks, Aave’s presence on zkSync, Metis, and Soneium has been, to put it bluntly, disappointing. According to data from DefiLlama, zkSync currently holds about $26 million in total value locked within Aave’s protocol—which sounds substantial until you realize this is a drop in the bucket compared to Aave’s overall $29 billion TVL. Soneium trails behind with $21.6 million, and Metis brings up the rear with just $11.7 million. But the real eye-opener comes when you examine the revenue these deployments have generated over the past month. In the 30 days leading up to the proposal, Aave earned a mere $714 from its zkSync deployment, $679 from Metis, and an almost laughable $150 from Soneium. To put these figures into perspective, during that same period, Aave generated over $7.7 million on Ethereum’s mainnet and nearly $298,000 on Base, another Layer 2 solution. The contrast is stark and undeniable—these three networks combined didn’t even generate $2,000 in revenue, while Ethereum alone brought in millions. This disparity highlights a fundamental problem in the DeFi space: deployment costs and maintenance requirements don’t scale down proportionally with network size or activity, meaning that small deployments can consume disproportionate amounts of time, attention, and resources.

The Hidden Costs of Maintaining Unprofitable Deployments

What makes these underperforming deployments particularly problematic isn’t just the lackluster revenue—it’s the ongoing operational burden they create. As the ACI explained in their proposal, even small Aave instances require “a non-trivial amount of attention from service providers and governance participants.” This is an aspect of blockchain deployment that often gets overlooked when projects are rushing to establish a presence on every new network that emerges. Each deployment, regardless of its size or activity level, needs security monitoring, smart contract updates, governance oversight, and technical support. Service providers must keep track of protocol parameters across multiple chains, ensuring that everything functions smoothly and securely. Governance participants—the community members who vote on proposals and guide the protocol’s direction—must split their attention across all these deployments, diluting their focus and making effective oversight more challenging. Additionally, there are risks associated with maintaining code across multiple environments; each deployment represents another potential vector for vulnerabilities or exploits. The financial costs include gas fees for deploying updates, paying for oracle services to provide price data, and compensating the teams that monitor and maintain these deployments. When you factor in all these hidden costs against the minimal revenue these networks generate, it becomes clear why the ACI describes these instances as “clearly non-viable.” The opportunity cost is perhaps even more significant—the time and resources spent maintaining these marginal deployments could be redirected toward improving Aave’s performance on its more successful networks or developing new features that would benefit the entire protocol.

A New, Stricter Approach to Future Expansion

The proposal doesn’t just advocate for pruning existing deployments; it also sets forth a much more demanding framework for any future expansion efforts. Moving forward, the ACI suggests that Aave should only deploy to new blockchain networks if those chains can guarantee a minimum of $2 million in annual revenue to the protocol. This represents a fundamental shift in strategy from opportunistic expansion to selective, revenue-focused deployment. The rationale behind this threshold is straightforward: Aave’s liquidity—the capital that users deposit and that makes the protocol valuable—has been systematically underpriced when considering both the upfront costs of deployment and the recurring expenses of maintenance. By establishing this $2 million minimum, Aave is effectively saying that new partners need to demonstrate serious commitment and realistic user adoption projections before the protocol will dedicate resources to their network. This approach acknowledges that Aave’s brand, technology, and liquidity have real value that shouldn’t be given away cheaply. It also reflects a maturing industry where DeFi protocols are moving beyond the “spray and pray” expansion mentality that characterized earlier growth phases. Rather than treating each new Layer 2 network as an opportunity that can’t be missed, this framework encourages careful evaluation of whether a deployment makes strategic and financial sense. It shifts some of the burden of proof onto the blockchain networks themselves, requiring them to demonstrate that they can deliver actual users and activity, not just promises and incentives.

Overwhelming Community Support and Governance Consensus

The response from Aave’s governance community has been unambiguous and enthusiastic. The snapshot vote, which runs through February 7, has attracted overwhelming support, with 257,300 votes in favor of the proposal and exactly zero votes against it. This unanimous backing is particularly notable in the decentralized governance world, where controversial proposals typically generate at least some opposition. The unanimity suggests that the community broadly recognizes both the problem that the proposal addresses and the soundness of the solution being offered. It reflects a growing sophistication among DeFi governance participants who understand that sustainable growth sometimes requires difficult decisions, including pulling back from markets that aren’t performing. This kind of governance consensus is crucial for implementing potentially unpopular measures like shutting down existing deployments, which might disappoint users on those networks or strain relationships with the Layer 2 teams involved. The strong community support also validates the analytical approach that the ACI took in presenting the proposal, backed by clear data and concrete financial metrics that make the case for action compelling. It demonstrates that Aave’s governance process is functioning as intended, allowing the community to make rational, evidence-based decisions rather than emotional or politically motivated ones. This successful governance action may also serve as a model for other DeFi protocols facing similar challenges with overextended deployments across multiple networks.

Broader Implications for Ethereum’s Layer 2 Strategy

The timing of this proposal is particularly interesting because it coincides with broader questions being raised about Ethereum’s Layer 2 scaling strategy. On the same day that voting began on Aave’s proposal, Ethereum co-founder Vitalik Buterin published a controversial post suggesting that the rollup-centric roadmap for Ethereum “no longer makes sense” and arguing that Layer 2 networks should pivot toward other use cases beyond simple scaling solutions. This convergence of events highlights a growing recognition that the Layer 2 ecosystem may have proliferated too quickly without adequate attention to sustainable business models and user adoption. Aave’s decision to consolidate its deployments could be seen as a canary in the coal mine—an early indicator that the Layer 2 landscape will eventually consolidate around a smaller number of successful networks rather than continuing to fragment across dozens of competing solutions. For Layer 2 networks, this proposal serves as a wake-up call that simply launching a new scaling solution isn’t enough; they need to cultivate genuine user communities and economic activity that justifies the attention and resources of major DeFi protocols. For the broader DeFi ecosystem, Aave’s move might encourage other protocols to conduct similar audits of their deployment strategies, potentially leading to a wave of consolidation that could actually strengthen the remaining networks by concentrating liquidity and users. This strategic refocusing could ultimately benefit the entire Ethereum ecosystem by creating clearer winners in the Layer 2 space, reducing user confusion, and allowing developers and protocols to optimize their efforts on networks with proven traction rather than spreading resources thin across speculative deployments.