Aave Horizon Raises JAAA Borrowing Limits, Boosting Tokenized CLO Collateral

Aave Labs has raised reserve-tier borrowing limits on the Janus Henderson Anemoy AAA CLO Fund token (JAAA) within Aave Horizon, letting borrowers draw more capital against the tokenized collateral, the protocol developer said in an announcement implementing a proposal first floated in October.

The reserve-tier loan-to-value limit rose to 87% from 81%, while the liquidation threshold moved to 89% from 86%. The liquidation bonus stayed at 5%. A separate GHO E-Mode LTV limit held at 88%, leaving that stablecoin-borrowing configuration unchanged.

What do the new parameters mean for borrowers?

LTV caps how much a borrower can draw against posted collateral, so the six-point increase from 81% to 87% effectively expands credit capacity on every JAAA position without requiring additional collateral. The liquidation threshold — the point at which a position becomes eligible for liquidation — rose three points to 89%, giving borrowers slightly more headroom before margin calls trigger. The unchanged 5% liquidation bonus keeps the incentive for liquidators to step in once that threshold is breached.

On-chain data underscored the market's scale at the time of the change. JAAA supply totaled $51.9 million across 11 addresses as of Oct. 15. Seven reserve-tier positions carried $45 million in outstanding debt, split between $34.5 million in Ripple USD (RLUSD) and $10.5 million in GHO, Aave's native decentralized stablecoin. That means roughly 87% of all JAAA supply currently backs borrowing activity on the market.

The parameters follow an October governance proposal to adjust JAAA's collateral limits. Aave Labs executed the changes after that process concluded.

How does JAAA fit into Aave Horizon?

JAAA is issued through Centrifuge, the tokenization infrastructure provider, and is backed by AAA-rated collateralized loan obligation tranches managed by Janus Henderson. It represents one of the most liquid tokenized credit instruments in DeFi, and its use as collateral links on-chain lending directly to institutional-grade fixed-income exposure.

Aave Horizon is not the mainnet Aave market. It is a separate, licensed market initially forked from Aave V3.3, built to accommodate real-world asset collateral under compliance constraints. Access rules differ from the core protocol: users must obtain approval from a real-world asset issuer before they can supply tokenized collateral such as JAAA. Stablecoin suppliers face no such gate and can participate without issuer approval.

That two-tier structure matters for the operational consequence of the LTV increase. Because only issuer-approved addresses can post JAAA, the higher limit applies to a small, permissioned set of wallets — the 11 addresses holding the token as of mid-October. For them, the change converts existing JAAA balances into meaningfully larger borrowing capacity against RLUSD and GHO.

For the wider market-structure picture, the move signals Aave's continued push into tokenized real-world assets as a collateral class, with parameter tuning now happening iteratively as position data accumulates. Expect further calibration of JAAA's risk settings as Horizon's borrower base and debt levels grow.