We support the listing of cbETH to the Aave V3 market. As many of the community suggested, the liquidity of cbETH in DEX is insufficient for the supply itself. The supply of cbETH can be increased as more people stake.
The liquidity in DEX such as the Uni V3 cbETH/WETH pool, the pool size sits around $6.5m which we think it is not enough for mass liquidation. Additionally, around 60-70% of the volume came from Coinbase.
For these reasons, we are not in support of listing cbETH to the V2 market. However, we are in support of listing cbETH to Aave V3 market in isolation mode with a very tight parameters. After that, the e-mode can be supported for looping between ETH correlated assets.