The Aave Avalanche Market is currently considering a proposal by MatthewGraham and ChrisG from Index Coop and Defi Pulse to update two AVAX risk parameters: LTV and Liquidation Threshold. The proposed changes aim to align these parameters with the Moderate risk level chosen by the Aave community, in an effort to balance the overall risk tolerance of the protocol with specific asset risks¹.

The AVAX token risk score, as compiled by Index Coop, stands at B+. This score was determined based on criteria set by the Aave community, which includes market size and demand fluctuation. The AVAX token on the Avalanche network was evaluated using this criteria, with data as of Jan. 23, 2021¹.

Index Coop suggests adjusting the AVAX Loan to Value from 50% to 60% and the AVAX Liquidation Threshold from 65% to 70%, based on the volatility data¹. The implementation of these changes is still under discussion, with an AIP vote potentially indicating community intent to modify the requirements. The changes could be implemented by the guardians of the Aave Avalanche Market or via the AIP if a permissionless process is established by that time¹.

The proposal has received support from Luigidemeo88, who believes that the changes align with other coins' risk metrics and the progression of the Aave Market on Avalanche and $AVAX as a coin². The final decision on the proposal is yet to be made, and the community is actively engaged in the discussion.