[ARFC] Update AAVE LTV and Liquidation Threshold Percentages
Vote Result: YES
Rationale
Given that both risk providers think that increasing the AAVE token’s LTV and LT parameters is acceptable from a risk perspective, albeit with different parameters to the initial proposal, we are fairly comfortable with this change. Only $2.5M would be liquidated if AAVE price drops by 25%, which is much higher than the 17.25% largest daily drop over the last year. AAVE users are generally conservative, have high collateralisation, and high health scores, which reduces risk as well. However, it is important to note that there is a clear risk of bad debt generation, especially with AAVE being a native token that could lead to a loop of token price declines in a very heated market.
Therefore, we will vote YES in favour of this proposal.