The discussion primarily revolved around the concerns raised by Aavenomics regarding the perceived lack of sufficient cushion in Aave's protocol in the event of a sharp price decline or congestion¹. They pointed out that only about $100 million of the $338 million staked Aave can be slashed as a buffer before lenders start experiencing losses. This, they argued, is not significant enough considering the $7.3 billion total value locked (TVL) in the protocol.

Aavenomics also questioned the barriers to more Aave being staked and expressed disappointment that staking is only possible on Ethereum due to its high fees¹. They proposed the idea of adding staking to Polygon or other chains to increase yield and provide more cushion for tail risk losses. Furthermore, they sought clarity on whether there have been any loan losses in the past, suggesting that if there haven't been any despite previous downturns, it might indicate a low likelihood of future impairments on loans¹.

The discussion did not conclude with a definitive solution but it highlighted the need for a more robust buffer system in Aave's protocol and the potential benefits of expanding staking to other chains. It also underscored the importance of understanding the history of loan losses to better predict future risks.