Over a year, it is 1/4 of the ecosystem reserve, but it’s actually only 1/20 of the total market supply. If the goal is decentralization of the protocol, this is actually pretty slow in my opinion.
Isn’t the core value offered by AAVE realized by the process of borrowing though? I think pushing users to a higher health factor is the wrong approach to prevent things like insolvency to the protocol. The user should feel comfortable taking as much of a risk as the AAVE protocol lets them which means that real solutions need to focus on getting positions liquidated on time and seting liquidation parameters appropriately.
You point out recursive borrowing, but I’m not really sure why that would be a bad thing. I think it’s wonderful that people can take whale-like positions with small amounts of capital as long as the liquidation mechanics are solid. Overall, I think it should be AAVE’s goal to invite users to play with as much liquidity as the protocol allows. If we think things are too risky, AAVE should adjust the liquidation parameters.
I think this is a little disingenuous… This was posted early in the thread that you linked in your post. Or perhaps you’re asking for it to be posted in this thread as well. In which case I can agree. There’s no reasoning in this thread.
I mostly agree with everything else you wrote though. I think these proposals could align a bit more with community desires, especially considering that there are a few threads that requested LM rewards with pretty good support but aren’t mentioned in this proposal at all. TUSD SUSD