Aave says proposed V3.8 upgrade will keep flash-loan liquidations working
Aave Labs said the reentrancy guard in its V3.8 proposal will not block flash-loan liquidations, according to newsbtc.com. Governance vote and audits are still pending.
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what happened
Aave Labs has clarified that the proposed V3.8 security upgrade will leave flash-loan liquidations intact. The statement, dated October 23, responds to a proposal posted on October 21 and explains how the new guard will work alongside existing integrations, newsbtc.com reports.
The guard limits re-entry into protected Pool functions, but flashLoan() and flashLoanSimple() are excluded, so receiver callbacks can still call Pool actions, including liquidations. This matters for contracts that borrow an asset, repay an unhealthy position and complete settlement within the same transaction.
The design uses transient storage under EIP-1153, which exists only for the duration of a transaction. Before any deployment, the proposal must go through community feedback, a Snapshot vote, security review and an on-chain vote, with Certora and other reviewers expected to assess the changes.
why it matters
For markets the story is narrow, concerning technical compatibility and security at a large DeFi lending protocol. The final code may differ from the stated design, so actual behavior will depend on what governance approves, and integrators on Ethereum should verify compatibility once code is published.
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sources
- Aave Says V3.8 Security Proposal Preserves Flash-Loan Liquidations — newsbtc.com, 25 October 2026 at 02:00 UTC
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