Chaos Labs CRV Aave V3 Polygon LT Reduction
01Summary
Proposal to reduce the Liquidation Threshold (LT) for CRV on Aave V3 Polygon from 65% to 50% (a 15% reduction) to mitigate risk exposure due to declined market liquidity. This change would affect approximately 8 accounts totaling ~$141 at risk of liquidation.
- Type
- parameter change
Key changes
- Reduce CRV Liquidation Threshold from 65% to 50% on Aave V3 Polygon(high)
- Alignment of CRV parameters with market conditions and other deployment parameters(medium)
- Reduction of CRV borrowing power(high)
Notable concerns
- 8 accounts totaling approximately $141 will be at risk of liquidation upon proposal approval
- Market liquidity for CRV has substantially declined
- Users may have accounts eligible for liquidation following the threshold reduction
Generated by Kvorum
02Description
Simple Summary
A proposal to reduce the Liquidation Threshold (LT) for CRV on Aave V3 Polygon.
Motivation
As the market liquidity of CRV has seen a substantial decline, this proposal seeks to address this by decreasing the liquidation threshold (LT) for CRV on Polygon V3. The objective is to mitigate the risk exposure associated with CRV and diminish its borrowing power, thereby aligning it more accurately with the existing market conditions and its parameters on other deployments.
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. Chaos Labs will publicly communicate the planned amendments and list of affected accounts leading to the on-chain execution.
Analysis
Chaos Labs recommends a 15% reduction. As of October 25, seven total accounts amounting to ~$141 are at risk of liquidation following the proposed changes.
| Asset | Current LT | Rec LT | Value Liquidated ($) | Accounts Liquidated |
|---|---|---|---|---|
| CRV | 65% | 50% | 141 | 8 |
Specification
| Asset | Parameter | Current Value | Recommendation | Change |
|---|---|---|---|---|
| CRV | LT | 65% | 50% | -15% |
References
- Implementation: AaveV3Polygon
- Tests: AaveV3Polygon
- Snapshot
- Discussion
Disclaimer
Chaos Labs have not been compensated by any third party for publishing this ARFC.
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal's calldata consists of a single cross-chain forwarding call (forwardPayloadForExecution) that routes execution to chain 137 (Polygon) via the standard Aave short executor pattern referenced in the proposal's linked implementation contract. This is the typical boilerplate mechanism used by Aave governance to execute Polygon-side risk parameter changes and does not itself reveal the specific CRV Liquidation Threshold value being set — that logic resides in the target payload contract on Polygon, which is not included in the decoded calldata provided. Because the actual numeric parameter change (65% -> 50%) cannot be independently verified from this single forwarding call, a precise value-by-value comparison against the prose is not possible. However, nothing in the decoded action contradicts the description: the target chain (Polygon), and the use of the governance-standard forwarding pattern are consistent with what a CRV LT reduction proposal on Aave V3 Polygon would look like. No unrelated transfers, role grants, or unexpected targets are present. Given the lack of visibility into the final parameter-setting payload, confidence in this assessment is low, but there is no evidence of a mismatch, so it is marked consistent rather than flagged with a discrepancy the reviewer should be alarmed about.
Generated by Kvorum
04Actions
- Target
- 0x9aee…2bc7
- Value
- 0 wei
- Function
- forwardPayloadForExecution((uint256,uint8,address,uint40))
- Arguments
{ "0": [ "137", "1", "0x401B5D0294E23637c18fcc38b1Bca814CDa2637C", "6" ] }- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| 320x329c…3ed4 | For | 116.5K | 20.86% | — | 3y ago |
| 070x0703…961b | For | 86.8K | 15.54% | — | 3y ago |
| 130x13bd…8548 | For | 61.3K | 10.97% | — | 3y ago |
| 230x2331…7e73 | For | 60K | 10.74% | — | 3y ago |
| 2C0x2cc1…4df1 | For | 43.7K | 7.82% | — | 3y ago |
| B90xb933…8dd1 | For | 42.4K | 7.59% | — | 3y ago |
| EA0xea17…6676 | For | 38.8K | 6.94% | — | 3y ago |
| EZezr3al.eth0x8659…7d0e | For | 38K | 6.81% | — | 3y ago |
| 570x57ab…2922 | For | 26.2K | 4.69% | — | 3y ago |
| 870x8787…ea52 | For | 21.1K | 3.78% | — | 3y ago |
| E40xe459…e666 | For | 20K | 3.58% | — | 3y ago |
| 180x1855…98ba | For | 3.5K | 0.63% | — | 3y ago |
| 770x775c…d75b | For | 346.2 | 0.06% | — | 3y ago |
| DF0xdf06…4977 | For | 27.3 | 0.00% | — | 3y ago |
| 950x9529…bd83 | For | 1.2 | 0.00% | — | 3y ago |
| FE0xfe49…e072 | For | 0.2 | 0.00% | — | 3y ago |
| DB0xdb3d…52f0 | For | 0.1 | 0.00% | — | 3y ago |
| 5B0x5bd5…77c6 | For | 0.1 | 0.00% | — | 3y ago |
| B90xb936…579d | For | 0 | 0.00% | — | 3y ago |
07Forum
No forum thread is confidently linked to this proposal.
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