# \[ARC\] Risk Parameter Recommendations for Aave V2 Polygon (2022-11-25)
**URL:** https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826
**Category:** Risk
**Created:** [November 25, 2022, 4:57pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826 "2022-11-25T16:57:52Z")
**Posts on this page:** 6
**Page:** 1
### Author:  [@OriN](https://governance.aave.com/u/OriN)
#### Post date: [November 25, 2022, 4:57pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826/1 "2022-11-25T16:57:52Z")
# **Simple Summary**
In response to recent market events and the resulting discussion on the Aave governance forum ([link](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-eth-2022-11-22/10757)) regarding Aave community risk appetite, Llama and Chaos Labs propose to make a series of parameter changes to the Polygon Aave v2 Liquidity Pool.
# **Abstract**
This proposal presents an alternative pathway forward to [AIP-124](https://app.aave.com/governance/proposal/?proposalId=124). The community can elect to Disable Borrowing whilst retaining the ability to Deposit assets across some of the reserves rather than Freezing as outlined in AIP-124.
We specifically recommend freezing for GHST, BAL, and Sushi, while only pausing borrowing on other markets as a risk-off approach because the community can utilize the asset on the Polygon v3 deployment with enhanced risk tooling, such as supply and borrow caps.
This proposal is a collaborative effort between Llama and Chaos Labs and reflects the community’s [governance forum discussion](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-eth-2022-11-22/10757/35).
# **Motivation**
In response to recent market events and the continued contraction of liquidity across markets, this proposal seeks to reduce the risk profile across many of the higher volatile assets. AIP-124 presents an opportunity to Freeze many Reserves, whereas this proposal intends to Disable Borrowing where possible, whilst retaining the ability to deposit assets.
# **Specification**
The following risk parameter proposal is presented below:
| Asset | Status | Gauntlet AIP-124 | Proposed Action |
| --- | --- | --- | --- |
| BAL | Borrowing Enabled,Collateral Enabled | Freeze | Freeze |
| CRV | Borrowing Enabled, Collateral Enabled | Freeze | Disable Borrow |
| Aavegotchi(GHST) | Collateral Enabled, Borrowing Disabled | Freeze | Freeze |
| LINK | Borrowing Enabled, Collateral Enabled | Freeze | Disable Borrow |
| SUSHI | Borrowing Enabled, Collateral Enabled | Freeze | Freeze |
| DPI | Borrowing Enabled, Collateral Enabled | Freeze | Disable Borrow |
**We will publish an AIP with these recommendations shortly.**
---
### Author:  [@Llamaxyz](https://governance.aave.com/u/Llamaxyz)
#### Post date: [November 27, 2022, 2:57pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826/2 "2022-11-27T14:57:34Z")
Hi Everyone 👋
We have published this AIP for community members to vote on:
> **[Aave - Risk Parameter Updates for Aave v2 Polygon](https://app.aave.com/governance/proposal/126/)**
>
> Update Polygon v2 Risk Parameters
Thank you in advance for your participation in the vote.
---
### Author:  [@VonNeumann](https://governance.aave.com/u/VonNeumann)
#### Post date: [November 28, 2022, 8:45pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826/3 "2022-11-28T20:45:48Z")
“This proposal is written in an atomic manner that will unfreeze reserves in case [AIP-124](https://app.aave.com/governance/proposal/?proposalId=124) gets executed before.”
This seems strange that it will unfreeze reserves if people just recently voted for them to be frozen. I think a solution to this might be that neither Gauntlet nor Chaos should override the other’s passed proposal within at least 30 days… otherwise, we risk just going back and forth.
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### Author:  [@fig](https://governance.aave.com/u/fig)
#### Post date: [November 28, 2022, 9:44pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826/4 "2022-11-28T21:44:29Z")
This is something we’d like to see more of - greater communication between Gauntlet & Chaos.
While yes, the two are competitive in nature, the lack of coordination causes confusion in the DAO.
We urge both teams (@Pauljlei @OriN et al.) to work together for a unified front.
In the meantime, it will lead to more uncertainty and voter apathy, crippling the DAO.
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### Author:  [@OriN](https://governance.aave.com/u/OriN)
#### Post date: [November 28, 2022, 10:07pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826/5 "2022-11-28T22:07:37Z")
Thanks, Fig - we are working to coordinate proposals, analyses, and discussions with all relevant DAO contributors both behind the scenes and publicly in the forums. We do not anticipate having regular contradicting proposals where we “undo” each other’s work prior to community discussion, feedback, and alignment, but last week was a special circumstance. We support the initial decision to act fast and freeze markets until the proper analysis and community discussion could be done to determine which markets could be re-opened and in which way.
In the future, we hope something like the [Risk Council](https://governance.aave.com/t/improve-permissions-management-on-aave-v2-and-define-a-better-strategy-for-access-control-roles-on-aave-v3/10802) (as proposed by BGD) would streamline both incremental risk changes as well as emergency actions without requiring a full DAO vote. We’ve shared thoughts on the structure in that thread and would welcome community feedback there, as well.
As always, we’re excited to continue to contribute to the betterment of Aave and will tirelessly work with all relevant parties to ensure its security.
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### Author:  [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)
#### Post date: [November 29, 2022, 7:12pm UTC](https://governance.aave.com/t/arc-risk-parameter-recommendations-for-aave-v2-polygon-2022-11-25/10826/6 "2022-11-29T19:12:38Z")
After continued conversation and community feedback received around this proposal, and considering the abundance of recommendations from several parties this past week alongside the fact that Polygon markets are available on v3 - we have decided to pull AIP-126 and ask not to vote on this proposal. This will also allow the DAO to begin shifting usage from v2 to v3, where more risk controls are in place.
We are in a fluid and changing environment and are committed to keeping the community updated with our analysis and recommendations along the way.