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ChaosLabs introduced a new risk parameter in AAVE V3, the supply and borrow caps, and proposed a methodology for setting these caps, sparking active community discussion. While there's consensus on the need for a transparent and consistent methodology, the specifics, including considerations like market liquidity and asset maturity, are still under debate.
The discussion began with ChaosLabs introducing a new risk parameter in AAVE V3, the supply and borrow caps, and proposing a transparent methodology for setting these caps1. The methodology takes into account factors such as the optimal utilization rate, the current supply of the asset, and the supply cap of the asset. Ghostlyenergy responded positively to the methodology, suggesting that the liquidity of the asset and its trading pairs could also be considered in the future2.
Several community members engaged in the discussion, with GCao from Blockchain at Michigan questioning the parameters used in the methodology3. ChaosLabs clarified that these parameters were chosen as initial buffers to ensure sufficient liquidity and allow for additional borrowing4. Miguelmtz emphasized the need for a community-agreed framework for setting supply and borrow caps, suggesting that the borrow cap should be based on factors such as market liquidity, contracts risks, asset maturity, and bridges risk5.
The discussion also touched on the application of the borrow cap in current markets. Benjamin918 asked about potential follow-up proposals to adjust current markets, and ChaosLabs confirmed that they are constantly monitoring the markets and will propose amendments to the caps as needed6,7. Jkrivine from Mangrove expressed concerns about the inconsistent use of the borrow cap, suggesting that a cap preventing AAVE insolvency within the block would prevent potential attacks8.
In conclusion, the community is actively discussing the proposed methodology for setting supply and borrow caps in AAVE V3. There is a general consensus on the need for a transparent and consistent methodology, but the specifics are still being debated. The discussion is ongoing, with the community providing valuable feedback and suggestions for improvement.
Posted a year ago
Last reply 9 months ago
Summary updated 2 months ago
Last updated 04/12 00:18