Built by LlamaRisk. Owned by Aave Governance. Powered by the Chainlink Runtime Environment (CRE). LlamaGuard PT brings lifecycle-aware risk management to Pendle collateral. Now live for PT-srUSDe on Aave Ethereum.
LlamaGuard PT is live on Aave. Following approval by Aave governance, the PT risk oracle built by LlamaRisk is now live on Ethereum, securing the PT-srUSDe (22 October 2026) market as its first production asset.
It's the first in a series of LlamaGuard deployments that will bring our PT risk oracles to the Pendle markets across all Aave instances for which LlamaRisk operates risk, with markets on Monad, Plasma, and X Layer to follow in the near term (each subject to approval through Aave governance process). This is more than a new price feed: LlamaGuard PT turns proven, lifecycle-aware PT risk methodology into transparent automation that Aave owns, governs, and can independently verify.
#Optimizing PT collateral over the life of the position
A Pendle Principal Token (PT) behaves like a zero-coupon bond on a yield-bearing underlying: it redeems one-to-one at a fixed maturity and trades at a discount until then. Pricing it on-chain without exposing the market to manipulation usually means a fixed linear discount pricing model, which is safe but conservative. A single straight line has to cover the token's riskiest moment at every point in its life, so it underprices the collateral and leaves headroom: borrowing power the asset could support but the borrower can't access.
LlamaGuard PT turns that lifecycle-aware methodology into automated, protocol-owned infrastructure, keeping the discount and liquidation parameters aligned through bounded, onchain updates. A PT's risk profile is knowable and changes over time: volatility is high early in its life, when a small change in the underlying yield moves the price sharply, and decays toward maturity as the price path becomes near-deterministic. The oracle converts that information, the token's time to maturity and its live price path, into both the oracle price and the reserve's liquidation parameters, and tracks the risk dynamically. The valuation follows the Pendle market more precisely instead of sitting well below it, recovering the headroom, while the liquidation parameters (borrowing power, liquidation threshold, and liquidation bonus) begin conservative and taper more aggressively as the token approaches par.
The result is a valuation that stays smooth and predictable for borrowers seeking to leverage their PT collateral, and loss-absorbing parameters that stay defensive, sized to what a liquidator could realize at the worst price the market can quote. Together they make a compelling case for Aave as the most trusted venue for borrowers to leverage their PT tokens: more usable borrowing power against the same collateral, held to a standard that stays defensive exactly when it needs to be.
#LlamaGuard PT: built by LlamaRisk. owned by Aave. powered by Chainlink.
We built the oracle to read Pendle market state on-chain and run its methodology in three independent Chainlink Runtime Environment (CRE) workflows. Each reads its methodology parameters from an on-chain registry, computes its result, and publishes a signed report; a router validates that report and, in a single atomic on-chain transaction, writes the new value and triggers execution through the Risk Agents middleware Aave already owns.
Two things set this apart from the risk oracles that came before it.
It runs on credibly neutral infrastructure. Chainlink CRE leverages the same decentralized oracle infrastructure that already secures much of DeFi, validated by a decentralized network of Chainlink nodes rather than a private server the operator alone can see. Building on CRE also gives the workflow a crucial property: the off-chain workflow itself can be owned by the protocol, and its code made transparent to the protocol team and its auditors. There is no hidden backend.
And it is owned by Aave. Aave Governance owns every contract on this path. LlamaRisk holds a bounded role, enough to tune the published methodology parameters and propose updates, and nothing more. We cannot change the code or stop the workflow without Aave DAO approval and oversight. The full system, including on-chain LlamaGuard contracts and off-chain workflows, was reviewed by Aave Labs and audited by Certora between June and August 2026, and every parameter, every input, and every change it makes is recorded on-chain and independently verifiable.
This is what moving from delegation to protocol ownership looks like in production: not trusting an operator's black box to behave, but running a transparent system the protocol owns and can inspect, on infrastructure no single party controls.
#A new layer in the oracle stack
This is a shift in what an oracle is for. For most of DeFi's history the oracle stack delivered a market price and stopped there, leaving every protocol to implement its own bespoke risk processes. LlamaGuard adds the layer that was missing: a risk layer that ingests diverse, real-time signals, from liquidity and volatility to time to maturity and protocol state, decides which thresholds matter and how to respond, and delivers risk-managed pricing and risk-managed actions on-chain. It does this as infrastructure the protocol owns and can verify, not a black box it has to trust. That is the paradigm shift the PT oracle brings to Aave: risk management as a native part of the stack rather than a dependency bolted on from outside.
That capability is built to grow. On the same foundation, LlamaRisk will keep shipping risk oracle solutions that bring new categories of financial products into DeFi, and that expand Aave's capacity to manage risk with increasingly diverse, real-time signals. Each solution extends the risk layer rather than adding another dependency to trust.
#A growing suite of risk products
LlamaGuard is a growing suite, and each solution in it is a distinct piece of protocol-owned risk infrastructure. LlamaGuard NAV has been live since September 2025, nearly a year in production, pricing tokenized real-world assets on Aave with the same owned-and-verifiable design. LlamaGuard PT now enters production and begins expanding across the Aave markets where LlamaRisk operates risk, starting on Ethereum with Monad, Plasma, and X Layer next in line. More risk-management solutions will follow, each extending what Aave can price and manage on infrastructure it owns.
None of this is built alone. Chainlink's CRE gives us the neutral infrastructure to run on, Aave Labs reviewed the system end to end, and Certora audited it. Together with our partners, LlamaGuard is turning risk management into core protocol infrastructure. LlamaRisk exists to help the protocols you're building reach scale, resiliency, and an enduring user trust.
"Proper risk management is a massive unlock for bringing new financial products onchain. LlamaGuard risk oracles pair Aave's track record with Chainlink's infrastructure and LlamaRisk's expertise, giving Aave a risk layer it owns and can verify end to end. That is the kind of institution-ready foundation each new asset class needs as DeFi scales to meet global finance." — Stani Kulechov, Founder and CEO at Aave Labs
"Chainlink and LlamaRisk are enabling Aave to set a new standard for transparent, verifiable risk management across DeFi. Through the Chainlink Runtime Environment, Aave can govern critical risk processes while users can independently verify the outcomes, strengthening user protection and protocol resilience." — Johann Eid, Chief Business Officer at Chainlink Labs
"For years, running an automated risk oracle meant asking a protocol to trust a black box it couldn't see. LlamaGuard ends that trade-off: the same sophisticated, real-time risk logic, but owned by the protocol, powered by neutral infrastructure, and verifiable end to end. PT-srUSDe on Ethereum is the first of many." — Adam Sadowski, CEO at LlamaRisk
#About LlamaRisk
LlamaRisk is the independent risk manager for the Aave ecosystem, building risk as public, protocol-owned infrastructure. LlamaRisk delivers transparent, verifiable risk engineering that accelerates institutional onchain adoption.
We blend rigorous protocol research with real-time market monitoring and quantitative tooling to safeguard lending markets, stablecoins, and tokenized assets. Our risk engines optimize parameters and trigger proactive protections, helping protocols ship faster with guardrails that benefit the whole ecosystem.
#About Chainlink
Chainlink is the industry-standard oracle platform bringing the capital markets onchain and market leader powering the majority of DeFi. The Chainlink stack provides the essential data, interoperability, compliance, and privacy standards needed to power advanced blockchain use cases for institutional tokenized assets, lending, payments, stablecoins, and more. Since inventing decentralized oracle networks, Chainlink has enabled tens of trillions in transaction value and now secures the vast majority of DeFi.
Many of the world’s largest financial services institutions have also adopted Chainlink’s standards and infrastructure, including Swift, Euroclear, Mastercard, Fidelity International, UBS, ANZ, and top protocols such as Aave, GMX, Lido, and many others. Chainlink leverages a novel fee model where offchain and onchain revenue from enterprise adoption is converted to LINK tokens and stored in a strategic Chainlink Reserve. Learn more at chain.link.
#About Aave
Aave Labs is shaping the next generation of global onchain finance. The company builds leading products that individuals, public companies, and institutions rely upon, processing billions of transactions, reliably, and quickly – 24/7. Founded by Stani Kulechov, the original author of ETHLend in 2017 and Aave Protocol in 2020, Aave Labs continues to contribute major protocol upgrades, including Aave V4, and is a recognized innovator in decentralized finance. In 2023, the team introduced Aave’s overcollateralized stablecoin GHO, and Horizon, in August 2025, the fast-growing institutional platform for borrowing against tokenized real-world assets. Aave.com
Read the full technical proposal and methodology in the Aave governance forum: ARFC: Upgrade PT Risk Oracle to Protocol-Owned Infrastructure on CRE.