[ARC] Price Manipulation Implications for Aave V2: September 2022

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The Aave community is actively monitoring and addressing potential market risks, including price manipulation on exchanges like GMX, with a focus on all assets, not just low liquidity ones. Key strategies include the ongoing integration of V3, which offers protection against manipulatable oracles, and continuous improvement of proactive alerting and monitoring systems.

The discussion primarily focused on the recent price manipulation on exchanges, including GMX, and the potential market risk implications for Aave. The conversation was initiated by Pauljlei, who emphasized the importance of monitoring the situation and encouraged community feedback. The discussion expanded to include all assets, not just those with low liquidity, as the community sought to identify and analyze assets that could present a risk to Aave. An update on KNC was provided, highlighting its small fraction of both total supply and borrow on Aave, but also noting that the two largest borrowers with KNC supply are nearing the "at risk" threshold.

The AVAX-GMX situation sparked interest, leading to questions about its impact on Gauntlet's risk analysis approach for Aave markets, implications for v3, and potential direct actions such as capping borrow limits. Pauljlei assured the community that they are continually improving their proactive alerting and monitoring system, which includes screening for accounts that become at risk. He also mentioned the ongoing integration of V3 into their platform, highlighting that V3's siloed borrowing feature can offer protection against assets with potentially manipulatable oracles.

In conclusion, the community is actively monitoring and addressing potential market risks, with a focus on assets that could pose a threat to Aave. The ongoing integration of V3 and the continuous improvement of their proactive alerting and monitoring system are key strategies in managing these risks.

Posted a year ago

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Last updated 03/12 08:01