We think that based on the current market condition, we should prioritise risk management rather than capital efficiency. The current utilisation of AVAX is considered very efficient.
We agree with @Alex_BertoG that increasing the LTV will increase more sell pressure, and the current size of the liquidity pool may not be large enough.
However, these are our opinions based on the current information on the ARC. We would like to know more about the motivation behind this. How would this proposal benefit Aave and the current situation of AVAX? If you still want to push forward this ARC. Can you provide a more detailed risk analysis because this is an aggressive adjustment?
Again, these are only our current opinions based on what we know.