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TL;DR:
Gauntlet has not proposed changes to Aave V2 ETH parameters this week but has analyzed a user position supplying CRV and wETH for potential insolvency risk. They've also launched the Aave Arc Risk Dashboard for better understanding of market risk and parameter suggestions, and are observing a large CRV supplier with low borrow usage, who could become insolvent with an 80% CRV price drop.
In the recent discussions, Gauntlet has not proposed any changes to the Aave V2 ETH parameters for this week. However, they have conducted an analysis on a user position supplying CRV and wETH, which could potentially pose an insolvency risk under extreme scenarios1. These regular parameter updates are part of Gauntlet's strategy to maintain the overall risk tolerance of the protocol, while also making risk trade-offs between specific assets1.
The community has shown agreement on a Risk Off Framework, which involves lowering liquidation thresholds1. Gauntlet's recommendations are driven by an optimization function that balances insolvencies, liquidations, and borrow usage, using a wide array of varied input data1.
A large CRV supplier with the address 0x7a...5428 has been under Gauntlet's observation. The user currently has their lowest borrow usage in over 4 months, partly due to the recent uptick in CRV price. It would take roughly an 80% price drop in CRV with no liquidations for this user to start to become insolvent1.
In addition, Gauntlet has launched the Aave Arc Risk Dashboard and encourages the community to use Gauntlet’s Aave V2 Risk Dashboard. This will help the community to better understand the updated parameter suggestions and general market risk in Aave V21. This proactive approach to risk management and transparency is a key part of maintaining the stability and security of the protocol.
Posted 10 months ago
Last reply 10 months ago
Summary updated 2 months ago
Last updated 04/12 00:18