# Solvency

**URL:** https://governance.aave.com/c/risk/solvency/15.md

[Latest](https://governance.aave.com/latest.md) · [Categories](https://governance.aave.com/categories.md)

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## [Insolvency Refund from Gauntlet](https://governance.aave.com/t/insolvency-refund-from-gauntlet/10048)

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**Author:** [@inkyamze](https://governance.aave.com/u/inkyamze)\
**Replies:** 2\
**Last updated:** [November 23, 2022, 8:04am UTC](https://governance.aave.com/t/insolvency-refund-from-gauntlet/10048 "2022-11-23T08:04:21Z")

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Summary To increase our alignment with Aave and put “skin in the game,” we will refund a portion of our service fee should our risk parameter optimizations incur losses for the DAO during Gauntlet’s engagement. Our ultim…

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## [The need for collateral](https://governance.aave.com/t/the-need-for-collateral/10172)

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**Author:** [@royvillanueva96](https://governance.aave.com/u/royvillanueva96)\
**Replies:** 1\
**Last updated:** [October 25, 2022, 11:45am UTC](https://governance.aave.com/t/the-need-for-collateral/10172 "2022-10-25T11:45:52Z")

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Hello, I am a student doing a research about DeFi lending platforms and I wanted to ask a couple of questions. Could you walk me through the process of lending? And why do you need collateral in order to offer loans? Wha…

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## [Increase liquidation threshold of USDC to 99%](https://governance.aave.com/t/increase-liquidation-threshold-of-usdc-to-99/1645)

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**Author:** [@ghosts\_in\_the\_code](https://governance.aave.com/u/ghosts_in_the_code)\
**Replies:** 0\
**Last updated:** [December 6, 2020, 10:15am UTC](https://governance.aave.com/t/increase-liquidation-threshold-of-usdc-to-99/1645 "2020-12-06T10:15:46Z")

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tldr: If USDC peg breaks, Aave will anyway suffer (as will all of DeFi). We might as well fully absorb the risks of a USDC peg break. Borrowing will become as efficient as buying, and USDT will be shortable without locki…