Jack Paul 
Aave moved to limit its exposure to tBTC on Oct. 31 after Threshold paused new Bitcoin deposits, tBTC minting, and new redemption requests. The guardian multisig froze the tBTC reserve on Aave’s V3 Ethereum Core market. The action blocks new deposits and additional borrowing against the token, though existing positions can still be repaid, withdrawn, or liquidated.
What the freeze changes
LlamaRisk, an Aave risk service provider, said it prepared the freeze transaction to keep tBTC exposure from growing during the pause. The onchain transaction executed at 6:01 a.m. ET. It set the reserve’s maximum loan-to-value ratio to zero and left the liquidation threshold at 78 percent. Aave’s interface showed about 1,770 tBTC supplied, worth roughly $136.5 million at the time.
For existing borrowers, the freeze does not change position health factors or trigger liquidations, according to LlamaRisk. Repayments, withdrawals, and liquidations continue. Borrowing against other collateral remains available. Users who want to improve their health factors can repay debt or add other collateral, but they cannot deposit more tBTC while the freeze lasts. The action affects only tBTC on Ethereum Core, not other reserves or the wider market. Aave’s tBTC reserves on Base and Arbitrum were already frozen in earlier deprecation rounds.
Threshold pauses operations
Threshold’s Oct. 30 notice said it paused new Bitcoin deposits, tBTC minting, and new Bitcoin redemption requests through its app as a precaution while security maintenance is completed. Pending redemptions may still be paid on Bitcoin, but final settlement on Ethereum is paused and some transactions may be delayed. Holding, transferring, and using tBTC remain unaffected by Threshold’s pause.
Threshold warned users not to send Bitcoin to previously generated deposit addresses or try new minting or redemption operations through alternative interfaces. Users who already deposited Bitcoin should keep deposit receipts and transaction hashes rather than repeat transactions to clear a pending status. That advice matters because duplicate attempts can create confusion while the bridge is paused.
What comes next
LlamaRisk said it will monitor tBTC positions and secondary-market liquidity. It plans to propose restorative measures once it has assurance that tBTC operations have returned to normal. For now, the reserve freeze is a containment step, not a full shutdown of Aave. The key question is how quickly Threshold can finish its maintenance and whether tBTC liquidity holds up during the pause.