[ARFC] BGD. Risk Steward Phase 2: RiskSteward

If the community is in favor of the risk stewards being able to update the LT, we recommend setting this limit at 1% and only allowing decreases. We agree this would allow for a more gentle offboarding and derisking process for certain assets.

The Guardian does have the capability to freeze an asset. That said, the Guardian would require many signatures to enact swift action. Currently, the Risk Steward does not have the capability to reduce supply and borrow caps to 0, or to set LTVs to 0.

An example of where these capabilities would be useful is in our recent Recommendation to freeze and set LTV to 0 on low-cap Aave v3 Polygon collateral assets. Gauntlet and Chaos would be able to delist low-cap assets by first freezing and setting LTVs to 0, and then gradually decrease LTs and update IR curves, all through the Risk Steward, after consensus from the community.

In the case where the community chooses not to add freezing capabilities to the Risk Steward, we still recommend being able to decrease an asset’s caps by 100%. Consider a situation where we increase the cap 100%, and then 3 days later the asset poses severe risk. We would only be able to revert the initial increase and would essentially be unable to freeze supplies or borrows to the market.