DeFi risk manager Sentora submitted an Aave Request for Comment (ARFC) on Sept. 28 proposing to operate an isolated Aave V4 Hub on Ethereum, offering a 50% revenue split with Aave DAO while leaving liquidity suppliers to absorb all credit losses.
Under the proposal, Aave DAO would retain contract ownership and base permissions through its Governance Short Executor, but Sentora would manage day-to-day risk parameter adjustments through revocable operational roles.
Governance Rights and Parameter Controls
The proposed architecture isolates liquidity within Sentora's Ethereum Hub, preventing direct credit draws to or from other Aave DAO Hubs. Borrowable assets inside the market are limited to RLUSD, PYUSD, and OUSD, explicitly excluding USDC and USDT. Supported collateral listings include USDe, PST, PRIME, mWIN, and kBTC.
Sentora would hold immediate restrictive powers to pause or freeze reserves and tighten risk parameters via a one-way Risk Steward. However, parameter changes that increase risk, alter interest-rate curves, or adjust liquidation settings require a 48-hour on-chain delay. While this delay offers visibility, Aave DAO lacks a direct mechanism to cancel individual scheduled actions within that window without passing a full governance proposal to revoke Sentora's operational roles.
Furthermore, existing Aave risk service providers are not assigned or compensated to monitor, audit, or respond to incidents on this instance. New collateral additions or Hub deployments require a two-week forum review window, where an objection from a DAO service provider can pause the action and trigger a binding Snapshot vote. As institutional risk frameworks evolve across decentralized financial platforms, governance oversight remains dependent on voluntary community monitoring.
Revenue Sharing and Deficit Risk
The commercial agreement allocates 50% of protocol revenue—comprising reserve-factor earnings and protocol liquidation fees—to Sentora and 50% to Aave DAO. However, if a liquidation fails to clear a borrower's debt, the shortfall is recorded against the Hub asset, and suppliers of that asset bear the entire loss.
Unlike the core Aave V4 Umbrella framework proposed by TokenLogic—which outlines deficit offsets for Core WETH, Core USDC, and Core USDT—Sentora's proposal includes no backstop, deficit coverage, or Sentora-funded first-loss protection layer. CEO Anthony DeMartino previously argued in November 2025 that risk management demands continuous controls, yet the current proposal leaves suppliers unprotected against bad debt.
Key Takeaways
- Sentora's Sept. 28 ARFC proposes an isolated Aave V4 Hub on Ethereum with a 50% / 50% revenue split with Aave DAO.
- Borrowing is restricted to RLUSD, PYUSD, and OUSD, with collateral options including USDe, PST, PRIME, mWIN, and kBTC.
- Sentora receives immediate freeze authority, but risk increases require a 48-hour delay with no quick DAO cancellation tool short of role revocation.
- Suppliers bear 100% of deficit shortfalls without coverage from Aave's V4 Umbrella or a Sentora first-loss layer.
Why It Matters
This proposal highlights a growing debate in decentralized finance over the division of operational authority and financial liability. By delegating parameter management to a third-party risk manager without requiring a first-loss capital stake, the structure allows managers to earn upside while liquidity providers assume tail risk. If approved via Snapshot and on-chain AIP votes, this framework could set a precedent for modular, third-party risk delegation across major lending protocols.
