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Llamaxyz proposed an ETH nominated E-Mode on Aave Optimism v3 to boost wETH borrowing and revenue generation, using Chainlink oracles for exchange rates and price data. Despite some skepticism, the proposal received support and was progressed through the Aave Governance process, with corrections made to the initially proposed risk parameters.
The discussion revolved around a proposal by Llamaxyz for the creation of an ETH nominated E-Mode on Aave Optimism v31. The proposal aims to increase borrowing demand for wETH and enhance revenue generation, motivated by the observed demand for yield generation by borrowing wETH and acquiring more wstETH to loop1. The proposal also suggests the use of several Chainlink oracles for exchange rates and price information, with the wstETH oracle on Optimism expected to de-risk the Optimism E-Mode1.
The proposed risk parameters include a Loan to Value of 90.00%, a Liquidation Threshold of 93.00%, and a Liquidation Bonus of 1.00%1. However, Saludiego201 expressed skepticism about the idea, suggesting it would be better to wait for more history with the existing withdrawals or for them to be enabled in L22. On the other hand, ChaosLabs supported the proposal, referencing a previous discussion and their own methodology update3. A Snapshot proposal was created to progress this proposal through the Aave Governance process4.
Gauntlet also expressed support for the proposal, stating that they would provide risk parameter recommendations for the ETH-correlated E-Mode once certain conditions were met5. Michigan_Blockchain pointed out a potential error in the loan-to-value (LTV) and liquidation threshold (LT) figures, suggesting that the LT is usually higher than the LTV6. Llamaxyz confirmed this error and amended the post to reflect the correct figures7. The discussion concluded with the proposal being progressed through the Aave Governance process, with the community awaiting further updates.
Posted 7 months ago
Last reply 5 months ago
Summary updated 2 months ago
Last updated 08/12 04:39