Chaos Labs Risk Parameter Updates - CRV Aave V2 Ethereum
01Summary
Proposal to reduce CRV risk parameters on Aave V2 Ethereum by decreasing Liquidation Threshold from 58 to 55 (-3%) and Loan-To-Value from 52 to 49 (-3%). Following the Risk-Off Framework, this incremental reduction is expected to liquidate only 2 accounts with ~$3 in liquidation value.
- Type
- parameter change
Key changes
- Reduce CRV Liquidation Threshold from 58 to 55 (3% decrease)(high)
- Reduce CRV Loan-To-Value from 52 to 49 (3% decrease)(high)
Notable concerns
- 2 user accounts will be eligible for liquidation upon approval with approximately $3 in liquidation value
- Liquidation Threshold reductions may lead to user accounts being eligible for liquidations
- Part of series of incremental decreases to reach desired CRV exposure levels
Generated by Kvorum
02Description
Simple Summary
A proposal to reduce Liquidation Threshold (LT) and Loan-To-Value (LTV), for CRV on Aave V2 Ethereum.
Motivation
Following our recommendations to decrease Aave’s exposure to CRV on V2 Ethereum here, we propose a series of LT and LTV reductions.
As Liquidation Threshold reductions may lead to user accounts being eligible for liquidations upon their approval, we want to clarify the full implications to the community at each step. To best minimize this impact, we suggest reaching the desired settings by a series of incremental decreases, following the Risk-Off Framework previously approved by the community, with a reduction of up to 3% in any given AIP. In an attempt to avoid liquidations, Chaos Labs will publicly communicate the planned amendments and list of affected accounts leading to the on-chain execution.
In the graph below, we share data to quantify and visualize the effect of the recommended reductions on protocol users. For the proposed, 3% LT decrease, the impact on users at the time of this post is negligible (2 accounts liquidated, ~3$ liquidated).
| Liquidation Treshold | Accounts Liquidated | Liquidation Value |
|---|---|---|
| 55 | 2 | ~3$ |
Specification
| Asset | Parameter | Current | Recommended | Change |
|---|---|---|---|---|
| CRV | LT | 58 | 55 | -3% |
| CRV | LTV | 52 | 49 | -3% |
References
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
A calldata-vs-description analysis is not generated yet. Review the decoded actions →
04Actions
- Target
- 0x3171…9ed9
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
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07Forum
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