The discussion primarily revolves around the proposal by Llamaxyz for the deployment of Aave v3 on Ethereum, introducing two initial eMode Categories: Stablecoin Correlated and Ethereum Correlated. The Stablecoin Correlated category encompasses DAI, USDC, USDT, FRAX, LUSD, BUSD, sUSD, and TUSD, while the Ethereum Correlated category includes wstETH and ETH. The proposal aims to encourage migration from Aave v2 to v3 and increase borrowing demand, thereby enhancing the utilisation of Reserves and Revenue to the DAO. Llamaxyz also suggested potential adjustments to the Liquidation Penalty on Ethereum to reflect the network's relative gas cost, and the possibility of creating other eModes in the future.

However, the proposal faced criticism from Miguelmtz, who argued that it overlooks the community's conservative approach, the alignment of parameters and assets, and the significance of oracles for eMode parameters. Jmo provided a detailed analysis of the proposed categories, suggesting the inclusion of DAI due to its high usage and low risk, and the potential exclusion of USDT due to its high uncorrelation with USDC. They also recommended starting the ETH Correlated pool with a LTV of 85% and 90%, and a Liquidation Penalty of 3% due to the potential risks associated with these assets.

The community is now awaiting a Snapshot to determine if the proposal meets the short execution requirements. The discussion has highlighted the need for careful consideration of asset correlation, volatility, and risk when implementing eMode Categories on Aave v3.