[ARC] Risk Parameter Updates for Aave V2 ETH and Aave Arc (Fireblocks) 2022-11-17

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Pauljlei proposed to adjust the Liquidation Threshold and Loan To Value for the REN asset on Aave V2 to de-risk the REN market, with only one account facing liquidation due to these changes. The AIP is now live, and there's a potential for REN to be delisted as an asset in the future.

The discussion primarily revolved around a proposal by Pauljlei to adjust the Liquidation Threshold and Loan To Value for the REN asset on Aave V2, in accordance with AIP 117. The proposed changes, aimed at de-risking the REN market, included reducing the REN Liquidation Threshold from 65% to 60% and the REN Loan To Value from 60% to 55%. The proposal was backed by extensive data analysis, including an in-depth look at the top 30 borrowers' positions, borrow usages, and price changes of key assets since November 3, 2022.

One account, identified as 0x0e...7b38, was noted to be the only one that would be liquidated as a result of these parameter updates. This account has a total of ~$100 in supply. Pauljlei also clarified that there would be no changes to the Aave Arc protocol parameters at this time and encouraged the community to use Gauntlet’s Aave V2 Risk Dashboard for a better understanding of the updated parameter suggestions and general market risk in Aave V2.

Ccb_roci provided a detailed credit risk analysis of the borrower with the address 0x36...c363, indicating a strong credit score and a low probability of liquidation. The discussion concluded with Pauljlei announcing that the AIP is now live and reiterating that the account 0x0e...7b38 would be the only one liquidated from the parameter updates. The community was also informed about the possibility of delisting REN as an asset in the future.

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Last updated 04/12 15:05