Chaos Labs Risk Parameter Updates - CRV Aave V2 Ethereum
01Summary
Proposal to reduce Liquidation Threshold (LT) for CRV from 55 to 49 and Loan-To-Value (LTV) from 49 to 43 on Aave V2 Ethereum, representing a 6% reduction in both parameters following community vote for the 'Aggressive' option. This is part of a series of reductions to decrease Aave's CRV exposure, with over 12M CRV already withdrawn since the first reduction in July 2023.
- Type
- parameter change
Key changes
- Reduce CRV Liquidation Threshold from 55 to 49 (-6%)(high)
- Reduce CRV Loan-To-Value from 49 to 43 (-6%)(high)
- Continued reduction in Aave's exposure to CRV on V2 Ethereum following previous reductions(medium)
Notable concerns
- Liquidation Threshold reduction may lead to user accounts becoming eligible for liquidation upon approval
- Chaos Labs to publicly communicate affected accounts and list of users eligible for liquidation before execution
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. The first reduction in this cycle of LT updates was executed on July 3rd, 2023. Since the initial post proposing to reduce the LTs for CRV, we’ve observed over 12M CRV withdrawn from V2 Ethereum.
In the Snapshot for this proposal , the community has voted on the "Aggressive" option:
- “Aggressive” (Chaos recommended) - 6% reduction. This option suggests an LT configuration that optimizes the reduction without significantly increasing the number of accounts eligible for liquidation.
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. Chaos Labs will publicly communicate the planned amendments and list of affected accounts leading to the on-chain execution.
Specification
| Asset | Parameter | Current Value | Recommendation | Change |
|---|---|---|---|---|
| CRV | LT | 55 | 49 | -6% |
| CRV | LTV | 49 | 43 | -6% |
References
- Implementation: Ethereum
- Tests: Ethereum
- 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
- Target
- 0x2dcb…5350
- 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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