KVORUM
aaveSource: Aave governance v3 · #251

Prime Instance - Restore ETH LTV

executedFeb 21, 2025, 11:50 AM UTCby570x57ab…2922

01Summary

AISummary by Kvorumclaude-haiku-4-5

Proposal to restore ETH's Loan-to-Value (LTV) ratio from 0% to 82% on Aave v3's Prime instance, re-enabling ETH as collateral after it was disabled to prevent wETH/wETH leverage farming exploits. The proposal also updates the ETH Correlated eMode category to make wstETH a collateral asset while keeping wETH borrowable only.

Type
parameter change

Key changes

  • ETH LTV on Prime instance restored from 0% to 82%(high)
  • wstETH added as collateral asset in ETH Correlated eMode category with 93.50% LTV and 95.50% LT(high)
  • wETH remains borrowable but no longer collateral in ETH Correlated eMode(medium)

Notable concerns

  • Previous ETH LTV was set to 0% to prevent wETH/wETH leverage farming exploits; restoration requires reliance on new Merkl distribution qualification criteria to prevent similar abuse
Contracts0x61d04c6146a07b87b4c6591bde6370bc477d0b87
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

235 words

Simple Summary

This publication proposes restoring ETH’s LTV to 82% on the Prime instance of Aave v3.

Motivation

With the introduction of liquidity mining rewards for ETH deposits on Prime, some users exploited wETH/wETH leverage to farm rewards. In response, ETH’s LTV was set to 0, preventing new ETH collateral positions while preserving existing user positions.

Transitioning from direct liquidity mining emissions to a periodic Merkl distribution ensures that users leveraging wETH/wETH can be disqualified from rewards. By introducing a qualification criteria, incentives are directed towards users who engage with the protocol as intended.

This proposal focuses on re-enabling ETH collateral positions by restoring the LTV to 82%.

Specification

The LTV for ETH on Prime is to be amended as outlined below:

ParameterCurrentProposed
LTV0.00%82.00%

The ETH Correlated eMode category is to be amended as outlined below:

ParameterValueValue
AssetwETHwstETH
CollateralNoYes
BorrowableYesNo
LTV93.50%93.50%
LT95.50%95.50%
Liquidation Penalty1.00%1.00%

References

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

AIMismatch analysis by Kvorum

A calldata-vs-description analysis is not generated yet. Review the decoded actions →

04Actions

1 total
#0fallback()chain 0x1
Target
0x61d0…0b87
Value
0 wei
Function
fallback()
Arguments
{}
Calldata

05Tally

Summed from votes

Voters0
VP participating0
Outcome (current)—
Current support—

06Voters

0 total

No votes recorded yet.

07Forum

No forum thread is confidently linked to this proposal.