The discussion primarily revolved around a proposal put forth by Arif3480 to adjust five risk parameters across three Aave V2 assets, including the Liquidation Threshold and Liquidation Bonus. This proposal is part of a batch update aimed at aligning with the Moderate risk level chosen by the Aave community. The updates are a continuation of Gauntlet’s regular parameter recommendations and represent Gauntlet’s bi-weekly recommendations for the Aave Arc market. The goal of these updates is to balance the overall risk tolerance of the protocol while making risk trade-offs between specific assets.

The proposed changes include adjustments to the liquidation thresholds and bonuses for CRV, DAI, and WBTC. For CRV, the liquidation threshold would be lowered from 64% to 61% and the liquidation bonus from 8.5% to 8.0%. For DAI, the liquidation threshold would be increased from 85% to 90%. For WBTC, the liquidation threshold would be increased from 75% to 80% and the liquidation bonus would be decreased from 6.5% to 5.0%. As of 18th August 2022, these parameter updates would not result in any account liquidations, but this could change with significant price movements. The community is encouraged to use Gauntlet’s Aave V2 Risk Dashboard to better understand the updated parameter suggestions and general market risk in Aave V2.

The discussion concluded with the next steps, which include initiating a Snapshot immediately, as the community has recently weighed in on similar changes, and targeting an AIP on 23rd August 2022¹. This proposal and subsequent discussion reflect the community's ongoing efforts to manage risk and maintain the stability of the Aave V2 protocol.