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Gauntlet, a risk management platform, currently sees no need for changes to V3 Polygon's risk parameters but suggests potential for raising liquidation thresholds for ETH and MATIC-like assets given decreased volatility. They're monitoring liquidity pools with over 80% supply cap utilization and will provide cap recommendations as needed, with their decisions based on an optimization function considering various factors including asset volatility, trading volume, and liquidator behavior.
Gauntlet, a risk management platform, has suggested that there is no need for changes to the risk parameters for V3 Polygon at the moment. However, they have indicated that there might be a chance to raise the liquidation thresholds for ETH and MATIC-like assets, provided there is a decrease in volatility for these assets. Gauntlet is also keeping a close eye on liquidity pools with supply cap utilization exceeding 80%, which includes WETH, CRV, AAVE, MaticX, and stMATIC. They will provide cap recommendations as necessary, but no proposals to alter any parameters are being made currently1.
The recommendations made by Gauntlet are based on an optimization function that strikes a balance between insolvencies, liquidations, and borrow usage. The data they use for their agent-based simulations is diverse and changes daily. It includes factors such as asset volatility, asset correlation, asset collateral usage, DEX / CEX liquidity, trading volume, expected market impact of trades, and liquidator behavior1.
To better comprehend the updated parameter suggestions and the general market risk in Aave V3 Polygon, the community is advised to use Gauntlet’s Aave V3 Polygon Risk Dashboard. This dashboard provides information on Value at Risk and Liquidations at Risk, which represent the 95th percentile insolvency value and liquidation volume respectively, derived from simulations run over a range of volatilities to approximate a tail event1. This comprehensive overview provides a clear understanding of the current state of affairs and the potential future developments in the risk parameters for V3 Polygon.
Posted 9 months ago
Last reply 9 months ago
Summary updated 2 months ago
Last updated 08/12 04:39