In light of recent market fluctuations, Llama and Chaos Labs proposed a series of modifications to the Polygon Aave v2 Liquidity Pool, offering an alternative to AIP-124. The proposal aimed to disable borrowing while maintaining the deposit functionality across certain reserves, specifically freezing GHST, BAL, and Sushi, and merely pausing borrowing on other markets. This was a strategic response to the liquidity contraction across markets, intending to mitigate the risk profile of several highly volatile assets¹.

The proposal detailed risk parameter suggestions for a variety of assets, including BAL, CRV, Aavegotchi (GHST), LINK, SUSHI, and DPI, with proposed actions ranging from freezing to disabling borrowing¹. However, following extensive dialogue and community feedback, Chaos Labs retracted AIP-126 and advised the community against voting on this proposal. This decision was influenced by numerous recommendations from various parties and the presence of Polygon markets on v3, which boasts superior risk controls⁶.

The discussion also highlighted the necessity for improved coordination between Gauntlet and Chaos Labs to prevent confusion and voter apathy within the DAO. In response, OriN confirmed that efforts are underway to synchronize proposals, analyses, and discussions with all relevant DAO contributors⁵. This series of events underscores the importance of community feedback and collaboration in decision-making processes within the DAO.