KVORUM
aaveSource: Aave governance v3 · #172

Chaos Labs Risk Parameter Updates - sAVAX LT/LTV Adjustment

executedSep 30, 2024, 09:39 AM UTCby570x57ab…2922

01Summary

AISummary by Kvorumclaude-haiku-4-5

Proposal to increase sAVAX's liquidation threshold from 45% to 55% and LTV from 40% to 50% on Aave V3 Avalanche main market, with a minor E-Mode LTV increase from 92.5% to 93%. Based on market analysis showing $257M average market cap, upward supply trends, and well-distributed supply among leveraged users.

Type
parameter change

Key changes

  • Increase sAVAX Main Market LTV from 40% to 50%(high)
  • Increase sAVAX Main Market Liquidation Threshold from 45% to 55%(high)
  • Increase sAVAX E-Mode LTV from 92.5% to 93%(medium)
  • Increase WAVAX E-Mode LTV from 92.5% to 93%(medium)

Notable concerns

  • Daily annualized volatility of 90.88% and 30-day annualized volatility of 74.11% indicate significant price volatility
  • Largest single-day price drop was 14.5%
  • 95.6% of borrowed assets against sAVAX are WAVAX in E-Mode, creating concentrated borrowing risk
ContractsAave V3 Avalanche
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

265 words

Simple Summary

A proposal to increase sAVAX’s liquidation threshold and LTV on Aave V3 Avalanche.

Motivation

sAVAX is currently configured with a liquidation threshold (LT) of 45% and max loan-to-value (LTV) of 40%. Following our observations and simulations, we believe increasing the LT and LTV for this market is prudent.

sAVAX's average market cap over the past 180 days is $257M, and its daily average volume is $3.1M. It has registered a daily annualized volatility of 90.88%, a 30-day annualized volatility of 74.11%, and its largest single-day price drop was 14.5%.

Its supply is well distributed, with all but two of the top 10 suppliers leveraging the asset with WAVAX.

Supply has been trending upward since the end of July.

95.6% of the value of assets borrowed against sAVAX is WAVAX in E-Mode. USDC is the most popular non-E-Mode asset borrowed.

Specification

Given these observations, we recommend increasing sAVAX’s LTV and LT and increasing its LTV in E-Mode by a small amount.

AssetChainMarketCurrent LTVRecommended LTVCurrent LTRecommended LT
sAVAXAvalancheMain40%50%45%55%
sAVAXAvalancheE-Mode92.5%93%95%-
WAVAXAvalancheE-Mode92.5%93%95%-

References

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

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