This proposal has a small impact on risky positions and does not meaningfully reduce Aave’s exposure to CRV. Managing the excess risk to CRV requires addressing both the supply growth and restricting more borrows that increase risk. We continue to recommend freezing CRV and setting the CRV LTV to 0 to combat both of these aspects.
That being said, for this proposal, we recommend changing the LTV to 0 rather than only decreasing by 3%. Decreasing the LTV by only 3% does not restrict borrows that increase risk and therefore does not meaningfully reduce the excess exposure to CRV.
- Despite setting the LTV → 0 being circumventible, it provides an extra layer of difficulty for excess borrow to be taken out. We look forward to improvements across Aave v2 to make that check more rigorous and non-circumventable.