Venus Labs proposes sunsetting the isolated pools in the Venus V4 protocol. The rationale and the planned sunset process are outlined below.
Rationale
Isolated pools currently hold a total supply of approximately USD 2 million, with the majority concentrated in the Liquid Staked BNB pool (around USD 1.46 million). Of the eight deployed pools, five are already paused due to low activity. Since their launch, isolated pools have generated negligible revenue, less than USD 12,000 since the beginning of 2025, and continue to show low utilization and limited liquidity.
Meanwhile, the functionality of isolated e mode groups is already live in the core pool, making it possible to migrate the current isolated assets into the core pool. E mode groups allow higher risk assets to leverage the deep liquidity of the core pool while containing risk within defined asset sets. This design resolves the lack of liquidity issues inherent in isolated pools and provides a significantly better user experience. Functionally, e mode achieves what isolated pools were originally designed for, but in a more capital efficient and scalable way.
To streamline Venus Protocol’s product suite and direct resources toward higher-impact features, we propose sunsetting the isolated pools on a fixed timeline. This will give users sufficient time to unwind or migrate positions. Prime rewards currently allocated to any isolated pool will be shifted to the core pool (e.g. WETH in the isolated pool will also be shifted to WETH in the core pool).
Sunset Timeline
Phase 1: Proposal & Voting: 17th Dec
- Gather community feedback on the retirement of isolated pools.
- If no major concerns arise, publish and vote on the corresponding VIP.
- Users should claim all pending prime rewards for isolated pools
- Users are encouraged to start the repayment of their debt positions
Phase 2: Pause of Isolated Pool Markets: VIP will be executed on 23rd Dec if the proposal passes
- Disable new supply and borrow actions; existing positions remain unaffected.
- Suppliers may withdraw at any time.
- Borrowers should begin repaying, as adding collateral will no longer be possible and liquidation risk may increase.
- Users should claim all pending rewards (e.g. prime rewards + supply rewards) for isolated pools
Phase 3: Encouraged Migration: (possible roll out, not yet finalized and subject to change)
- Prime rewards for isolated-pool assets will be reallocated to the core pool.
- Gradually increase reserve factors to reduce supply APY and increase borrow APR, incentivising migration to the core pool.
- Increase liquidation incentives within isolated pools.
- Remove isolated pools from the main Venus UI; access will remain available via Product Docs only.
Once an asset’s supply reaches zero, it will be fully removed from the protocol.
If you have any major concerns or questions, please share them in the replies.