ARC: Risk Parameter Updates for Aave V2 and Aave Arc (Fireblocks) 2022-08-04

Reading time saved: 3 minutes

10 replies, 2491 views, 1 likes


Pauljlei proposed adjustments to seven risk parameters across four Aave V2 assets (CRV, DAI, ENJ, LINK) as part of Gauntlet's regular recommendations, aiming to balance insolvencies, liquidations, and borrow usage. An AIP has been published and voting is live, with the community advised to use Gauntlet's Aave V2 Risk Dashboard for understanding the changes and market risk.

The discussion primarily revolved around the proposal by Pauljlei to adjust seven risk parameters across four Aave V2 assets, including the Liquidation Threshold and Liquidation Bonus for CRV, DAI, ENJ, and LINK. This proposal is part of Gauntlet's regular parameter recommendations and is designed to align with the Moderate risk level chosen by the Aave community. The proposed changes are driven by an optimization function that balances insolvencies, liquidations, and borrow usage, with the simulation engine using a wide array of varied input data that changes daily. As of 8/3/2022, no accounts would be liquidated due to these updates, but this could change with significant price movements. The community is advised to use Gauntlet’s Aave V2 Risk Dashboard for a better understanding of the updated parameter suggestions and general market risk.

Pauljlei also announced a proposal targeting an AIP on 2022-08-09, with the services provided by Gauntlet to be governed by the terms of service available at He noted that Monthly Risk Reviews were being replaced with Market Downturn posts due to lack of engagement and quickly outdated market data. The community was directed to reference Gauntlet's risk dashboard for a current view of market risk. A snapshot vote was initiated and from 8/4/2022 to 8/12/2022, Pauljlei consistently reported that no accounts would be liquidated as a result of the proposed parameter updates. On 8/9/2022, he announced that the AIP had been published and voting was now live.

In conclusion, the discussion focused on the proposed changes to risk parameters and the initiation of a snapshot vote. The community is encouraged to use Gauntlet's tools for a better understanding of the changes and the associated market risk. The AIP has been published and voting is currently underway.

Posted a year ago

Last reply a year ago

Summary updated 2 months ago

Last updated 09/12 13:53