Chaos Labs Risk Parameter Updates AaveV3
01Summary
Proposal to increase Loan-to-Value (LTV) and Liquidation Threshold (LT) parameters for five Aave V3 assets across four chains: GNO on Gnosis, OP and ARB on Optimism and Arbitrum respectively, and stMATIC and MaticX on Polygon. Changes range from 3-8 percentage points and aim to improve capital efficiency while maintaining risk buffers based on VaR simulations.
- Type
- parameter change
Key changes
- GNO LTV increased from 45% to 48% (3 percentage points)(medium)
- GNO Liquidation Threshold increased from 50% to 53% (3 percentage points)(medium)
- OP LTV increased from 50% to 58% (8 percentage points)(high)
- OP Liquidation Threshold increased from 60% to 63% (3 percentage points)(medium)
- ARB LTV increased from 50% to 58% (8 percentage points)(high)
- ARB Liquidation Threshold increased from 60% to 63% (3 percentage points)(medium)
- stMATIC LTV increased from 45% to 48% (3 percentage points)(medium)
- stMATIC Liquidation Threshold increased from 56% to 58% (2 percentage points)(low)
Notable concerns
- Parameter changes increase leverage risk exposure across multiple chains and assets, though proposal indicates VaR simulations showed minimal or no increases in Value at Risk at recommended levels
Generated by Kvorum
02Description
Simple Summary
A proposal to adjust ten (10) total risk parameters, including Loan-to-Value and Liquidation Threshold, across five (5) Aave V3 assets.
Motivation
Increasing the liquidation threshold and LTV for assets allows Aave to enhance users’ capital efficiency. However, this must be balanced with proper risk management to ensure that there is a sufficient buffer in the event of large drawdowns and/or liquidations. The analyses below were conducted utilizing our LT simulations, which showed either minimal or no increases in VaR at the recommended LT levels, while also considering user distribution and on-chain liquidity.
Specification
Gnosis
| Asset | Current LTV | Recommended LTV | Current LT | Recommended LT |
|---|---|---|---|---|
| GNO | 45% | 48% | 50% | 53% |
Optimism
| Asset | Current LTV | Recommended LTV | Current LT | Recommended LT |
|---|---|---|---|---|
| OP | 50% | 58% | 60% | 63% |
Arbitrum
| Asset | Current LTV | Recommended LTV | Current LT | Recommended LT |
|---|---|---|---|---|
| ARB | 50% | 58% | 60% | 63% |
Polygon
| Asset | Current LTV | Recommended LTV | Current LT | Recommended LT |
|---|---|---|---|---|
| stMATIC | 45% | 48% | 56% | 58% |
| MaticX | 45% | 50% | 58% | 60% |
References
- Implementation: AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Gnosis
- Tests: AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Gnosis
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
A calldata-vs-description analysis is not generated yet. Review the decoded actions →
04Actions
This proposal carries no on-chain actions.
05Tally
Summed from votes
06Voters
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07Forum
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