The discussion revolves around the proposal by Llamaxyz to add MKR, the governance token of the Maker DAO ecosystem, to the Ethereum v3 Liquidity Pool on Aave¹. This proposal is supported by ACI and 3SE, and if approved by a Snapshot vote, an AIP will be submitted for voting. However, MarcZeller from ACI recommends against enabling borrowing of MKR due to its historically low borrowing volume. Instead, ACI suggests allowing MKR as a collateral asset in "isolation mode" only².

ChaosLabs and Gauntlet have collaborated to provide parameter recommendations for the listing of MKR on Ethereum V3. The joint recommendation includes parameters such as Isolation Mode, Enable Borrow, Enable Collateral, Loan To Value, Liquidation Threshold, Liquidation Bonus, Reserve Factor, Liquidation Protocol Fee, Borrow Cap, Supply Cap, Debt Ceiling, Variable Base, Variable Slope1, Variable Slope2, Uoptimal, Stable Borrowing, Stable Slope1, Stable Slope2, Base Stable Rate Offset, Stable Rate Excess Offset, and Optimal Stable To Total Debt Ratio^3,4.

Sakulstra raised concerns about the recommendation to adopt lower figures for the assets in isolation mode, questioning the feasibility of migration for mixed collateral holders⁵. In response, ChaosLabs explained that the migration of such assets will be an iterative process, and the aim is to make the AAVE V3 markets more appealing to MKR, UNI, and SNX holders over time⁶.

ChaosLabs is also developing a Migration Methodology to facilitate the transition of funds from AAVE V2 to AAVE V3. They recommend a 2-phased approach for the assets initially listed and clarify that GHO is a normal V3 asset without any extra features⁶. Finally, Llamaxyz announced that Llama has created a Snapshot incorporating the MKR parameters as suggested by Chaos Labs and Gauntlet⁷.

In conclusion, the discussion indicates a general consensus towards the addition of MKR to the Ethereum v3 Liquidity Pool on Aave, albeit with specific parameters and in isolation mode. The Snapshot vote will determine the final decision.