[TEMP CHECK] Arbitrum USDC Migration

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governance.aave.com

TL;DR:

The Aave community is discussing a proposal by Gauntlet to migrate bridged USDC.e to Native USDC on Aave's Arbitrum deployments, with a weekly 3% reduction in LTV and LT for USDC.e and a choice between conservative or aggressive borrow/supply caps. The community generally supports a conservative approach to minimize liquidations, and a Snapshot vote is expected next week to finalize the migration plan.

The community has been actively discussing a proposal by Gauntlet to facilitate the migration of bridged USDC.e to Native USDC on Aave’s Arbitrum deployments. The proposed changes include a weekly 3% reduction in LTV and LT for USDC.e, and a choice between a conservative borrow/supply cap of 80% of circulating token supply onchain or a more aggressive cap of 120%1.

Community members Jengajojo and 0xkeyrock.eth have expressed their support for the migration, advocating for a conservative approach to minimize significant liquidations for users who may not be actively monitoring the migration process 2,3. The discussion thus far indicates a general consensus towards a conservative approach to the migration, with an emphasis on minimizing potential liquidations.

Gauntlet has announced plans to move forward to the ARFC stage with a Snapshot vote, following initial support from the community. The vote is expected to take place next week4. The post also provides data on current and recommended values for USDC and USDC.e parameters, including borrow and supply caps. Notably, for native USDC, the aggressive caps are higher than the conservative caps, while for USDC.e, the aggressive caps are lower. This is intended to facilitate migration, such as asset flows from USDC.e to native USDC4.

However, there is an exception for the USDC.e borrow cap, where the conservative value is greater than the current parameter value. If the conservative option is chosen, the plan to increase the USDC.e borrow cap will not proceed, as it contradicts the migration recommendation4.

The post also includes data on potential liquidations if the USDC.e on Aave V3 on Arbitrum LT is reduced to 83%, 80%, and 76%. The number of liquidated users and the total amount liquidated increases as the LT decreases4. The community is now awaiting the Snapshot vote, which will determine the final course of action for the migration.

Posted 2 months ago

Last reply 2 months ago

Summary updated 2 months ago

Last updated 06/12 00:43