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Despite initial suggestions for a 2% reduction in the CRV Liquidation Threshold (LT), no changes will be made this week due to current market conditions and protocol usage. The decision, informed by analyses from Chaos Labs and Gauntlet, will be revisited next week with potential LT reduction recommendations.
In a recent discussion, Gauntlet provided an update on the CRV Aave V2 Ethereum Deprecation Plan. Despite initial suggestions from Chaos Labs for a 2% reduction in the CRV Liquidation Threshold (LT), it was decided that there would be no change to the LT this week due to current market conditions and protocol usage.
The decision was informed by analyses from both Chaos Labs and Gauntlet. Chaos Labs' analysis focused on the impact of a 2% reduction on top CRV suppliers. On the other hand, Gauntlet's analysis highlighted that since their last update, there has been a significant withdrawal of 22.14M CRV and repayment of 3.55M USDT by the user. This resulted in a 23.57% reduction in remaining debt. However, the user’s health factor declined to 1.85, despite the position reduction. Gauntlet therefore recommended maintaining a sufficient buffer to the user’s historical health factor maintenance levels, given the daily CRV volatility and the lack of improvement in CRV liquidity.
The discussion concluded with the promise to revisit CRV on Ethereum v2 and provide LT reduction recommendations in the following week. It was also clarified that Gauntlet has not received any compensation from any third-party for recommending any of the actions contained in this proposal1.
Posted 3 months ago
Last reply 3 months ago
Summary updated 2 months ago
Last updated 08/12 04:39