[ARFC] Enabling USDT as collateral on Aave v3 AVAX Market

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Alice proposed enabling USDT as collateral on the Aave v3 AVAX market and updating risk parameters to match USDC, aiming to boost protocol revenue and appeal to lenders. The proposal, supported by ChaosLabs and Gauntlet, has moved to the snapshot stage for community voting, marking a significant step towards implementation.

The discussion revolved around the proposal by Alice to enable USDT as collateral on the Aave v3 AVAX market outside of isolation mode and to update the risk parameters to match those of USDC. The goal of this proposal is to encourage the use of USDT for borrowing other assets on the v3 AVAX market, which would increase protocol revenue and make the platform more appealing to lenders1.

Feedback was sought from risk providers on the proposed risk parameters and caps2. Both ChaosLabs and Gauntlet supported the proposal, suggesting that the current LT, LTV, and LB configurations be maintained initially, with potential optimizations considered after usage has been assessed. They also proposed reducing the supply and borrow caps to 100M and 80M, respectively3,4. The community's role in determining their comfort level with the centralization risk associated with USDT was highlighted by Gauntlet4.

The discussion concluded with MarcZeller announcing that the proposal had been moved to the snapshot stage, with voting set to commence the following day5. This marks a significant step forward in the potential implementation of the proposal, pending the community's vote.

Posted 3 months ago

Last reply 3 months ago

Summary updated 2 months ago

Last updated 03/12 08:00