[ARC] Risk Parameter Updates for Aave V3 Avalanche: 2022-10-15

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Pauljlei proposed modifications to five risk parameters for Aave V3 Avalanche assets, aiming to balance protocol risk and enhance capital efficiency without significant market risk. The proposal, which only affects highly liquid assets, passed a Snapshot vote, indicating community acceptance and marking a step towards improved risk management for Aave V3 AVAX.

In a recent discussion, Pauljlei proposed modifications to five risk parameters, including Liquidation Threshold and Liquidation Bonus, for five Aave V3 Avalanche assets. These adjustments are based on the latest market data and aim to balance the protocol's overall risk tolerance while making specific asset risk trade-offs. The changes are expected to enhance capital efficiency on Aave V3 AVAX without introducing significant market risk. The proposal also includes the upcoming launch of a Risk Dashboard for Aave V3 AVAX, with the parameter recommendation methodology remaining consistent with AAVE V2, but with simulation models tailored to V3 AVAX.

The proposal was published and a Snapshot vote was scheduled, which has since passed. The changes only affect highly liquid assets on Aave V3 AVAX, a response to recent discussions about price manipulation risks. Pauljlei also shared a link to the proposal on snapshot.org, but the community's reaction to it remains unclear due to an undefined like count. The successful Snapshot vote indicates that the proposed changes have been accepted by the community, marking a significant step towards enhancing the risk management of Aave V3 AVAX.

Posted a year ago

Last reply a year ago

Summary updated 2 months ago

Last updated 09/12 13:53