[ARFC] Emode Risk Parameters Aave ETH V3 Pool Update

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The discussion focused on a proposal by MarcZeller to update risk parameters for ETH-correlated assets in the Aave ETH V3 pool, aiming to enhance efficiency and flexibility. However, due to community concerns about emergency triggers, mechanisms, and the killswitch, the proposal will be on hold until consensus is reached, after which it will move to the Aave Improvement Proposal (AIP) stage.

The discussion primarily revolved around the proposed update to the risk parameters for ETH-correlated assets (Category 1) in the Aave ETH V3 pool. The proposal, put forth by MarcZeller, aimed to enhance the efficiency and flexibility of these assets within the pool by adjusting the Loan to Value (LTV) and Liquidation Threshold (LT). The changes are designed to provide more borrowing power to users, enabling more leverage on wETH/Liquid Staking Tokens (LST) such as stETH, cbETH, or rETH leverage loops1.

However, the community members expressed some concerns. ChaosLabs recommended considering an increase in the LT of the E-Mode category only after ensuring all assets employ the primary exchange rate and the price sync adapter. They also advised against increasing the risk parameters until the discussion around emergency triggers and mechanisms is complete and the community has aligned on the desired solutions2. GarrettPetersen suggested that potential LT increases should occur after the community has aligned on next steps for the killswitch3.

In response to these concerns, MarcZeller agreed with GarrettPetersen's suggestion and stated that the proposal will move forward when other discussions have been resolved4. Thus, the conclusion of the discussion is that the proposed changes to the risk parameters will be put on hold until the community reaches a consensus on the related issues. The proposal will then be escalated to the Aave Improvement Proposal (AIP) stage for final approval.

Posted 6 months ago

Last reply 5 months ago

Summary updated 2 months ago

Last updated 04/12 00:18