# \[ARFC\] Adjusting WBTC Parameters to Address BitGO Transition Risks

**URL:** https://governance.aave.com/t/arfc-adjusting-wbtc-parameters-to-address-bitgo-transition-risks/19096
**Category:** Governance
**Created:** [September 18, 2024, 1:59pm UTC](https://governance.aave.com/t/arfc-adjusting-wbtc-parameters-to-address-bitgo-transition-risks/19096 "2024-09-18T13:59:58Z")
**Posts on this page:** 1
**Showing post:** 11

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### Author: ![ChaosLabs](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/chaoslabs/32/6850_2.png) [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)
#### Post date: [September 24, 2024, 5:19pm UTC](https://governance.aave.com/t/arfc-adjusting-wbtc-parameters-to-address-bitgo-transition-risks/19096/11 "2024-09-24T17:19:14Z")

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# Summary

A proposal to adjust WBTC’s risk parameters.

# Motivation

After discussions with the Llama Risk team, we have merged our previous [post](https://governance.aave.com/t/arfc-chaos-labs-risk-parameter-updates-wbtc-parameter-adjustments/19118) with this one and consolidated our proposal to present a unified specification for the Aave community’s consideration.

## Supply and Borrow Caps

We propose decreasing supply and borrow caps for all WBTC markets to a level 15% higher than current utilization.

## Liquidation Threshold

We propose decreasing the LT of all markets by 1 percentage point, finding a middle ground between increasing the buffer in case of liquidations and reducing the health of existing positions.

## LTV

We propose reducing LTV to 70% for all markets where it is currently higher than this value.

## Reserve Factor

We maintain our Reserve Factor recommendation included in the previous [proposal](https://governance.aave.com/t/arfc-chaos-labs-risk-parameter-updates-wbtc-parameter-adjustments/19118).

# Specification

Given these observations, we recommend making the following changes, with the new recommended value following the arrow:

| Version | Asset | Chain | Reserve Factor | LT | Potential Liqs. | LTV | Supply Cap | Borrow Cap |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| V3 | WBTC | Arbitrum | 20% → 40% | 78.0% → 77.0% | $1.40 | 73.0% → 70.0% | 5,000 → 3,800 | 1,115 → 260 |
| V3 | WBTC | Optimism | 20% → 40% | 78.0% → 77.0% | $277 | 73.0% → 70.0% | 1,200 → 650 | 250 → 48 |
| V3 | WBTC | Polygon | 20% → 40% | 78.0% → 77.0% | $55.40 | 73.0% → 70.0% | 3,100 → 1,900 | 851 → 85 |
| V3 | WBTC | Ethereum | 20% → 40% | 78.0% → 77.0% | $1,700 | 73.0% → 70.0% | 43,000 → 42,000 | 28,000 → 3,250 |
| V3 | WBTC.e | Avalanche | 20% → 40% | 67.0% → 66.0% | $50 | 0.0% | 2000 → 175 | 1,100 → 7 |
| V2 | WBTC | Ethereum | 80% | 82.0% → 81.0% | $1,400 | 72.0% → 70.0% | 0 | 0 |
| V2 | WBTC | Polygon | 99.99% | 75.0% → 74.0% | $1,100 | 70.0% | 0 | 0 |
| V2 | WBTC.e | Avalanche | 75% | 70.0% → 69.0% | $0 | 0.0% | 0 | 0 |

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_[View the full topic](https://governance.aave.com/t/arfc-adjusting-wbtc-parameters-to-address-bitgo-transition-risks/19096)._