V2 Ethereum LT Reductions
01Summary
Reduce liquidation thresholds on six assets (CRV, ENS, LINK, MKR, UNI, ZRX) in Aave V2 Ethereum as part of v2 deprecation framework. Expected to result in approximately $67,480 in liquidations affecting 47 accounts.
- Type
- parameter change
Key changes
- CRV liquidation threshold reduced from 18% to 14%(medium)
- ENS liquidation threshold reduced from 24% to 0.05%(high)
- LINK liquidation threshold reduced from 74% to 72%(low)
- MKR liquidation threshold reduced from 18% to 14%(medium)
- UNI liquidation threshold reduced from 20% to 14%(medium)
- ZRX liquidation threshold reduced from 12% to 8%(medium)
Notable concerns
- 47 accounts will be eligible for liquidation following approval
- $67,480 in total value expected to be liquidated
- ENS threshold reduction to 0.05% is particularly aggressive and may cause significant liquidations for ENS holders
Generated by Kvorum
02Description
Simple Summary
A proposal to reduce Liquidation Thresholds on Aave V2 Ethereum.
Motivation
Following the v2 deprecation framework, Chaos Labs and Gauntlet advise implementing the subsequent parameter changes to the frozen assets on Aave v2 Ethereum and Polygon
As Liquidation Threshold reductions may lead to user accounts being eligible for liquidations upon their approval, we want to clarify the full implications to the community at each step. We will publicly communicate the planned amendments and list of affected accounts leading to the on-chain execution.
Specification
Chaos and Gauntlet align on following recommendations, choosing the higher value between Gauntlet’s aggressive and Chaos’s moderate approach for each asset:
Aave v2 Ethereum
| Asset | Current LT | Recommended LT |
|---|---|---|
| CRV | 18% | 14% |
| ENS | 24% | 0.05% |
| LINK | 74% | 72% |
| MKR | 18% | 14% |
| UNI | 20% | 14% |
| ZRX | 12% | 8% |
| Value liquidated | Accounts liquidated | |
|---|---|---|
| Total | $67,480 | 47 |
References
- Implementation: AaveV2Ethereum
- Tests: AaveV2Ethereum
- [Snapshot](No snapshot for Direct-to-AIP)
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The decoded calldata contains only a single top-level action: a call to execute() on a payload contract address, with no decoded internal arguments. This is the standard pattern used by Aave governance proposals, where the actual parameter changes (in this case, per-asset Liquidation Threshold reductions for CRV, ENS, LINK, MKR, UNI, and ZRX) are implemented inside the payload contract's bytecode and executed via delegatecall when execute() is invoked. Because the trace/internal calls of this execute() are not provided, it is not possible to directly verify that the six specific LT values in the description table are precisely what the payload sets. However, this single execute() call target is consistent with the referenced GitHub implementation link (AaveV2Ethereum_ChaosLabsV2EthereumLTReductions), and there is nothing in the visible calldata that contradicts the description — no unexpected extra actions, no fund transfers, no unrelated targets. Given the lack of visibility into the internal logic of the execute() call, I cannot confirm the exact percentages match with high confidence, so confidence is set to low. No affirmative red flags (target mismatches, extra unrelated actions, or omitted major actions) are apparent from what is decodable, so the overall assessment is consistent, pending the caveat that internal execution details were not independently verifiable from the provided data.Model:GPT-5-mini
Generated by Kvorum
04Actions
- Target
- 0x8c56…b44c
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
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