[ARFC] Chaos Labs Risk Parameter Updates - MAI on Aave V3 - 2023.7.23

Simple Summary

A proposal to reduce the Supply and Borrow Caps and Debt Ceiling for MAI on Aave V3 Polygon, Avalanche, Arbitrum and Optimism


In light of MAI’s recent depegging and the insights provided in the Chaos Labs - MAI Depeg Update , we propose a conservative approach, including a temporary reduction in both the supply and borrow caps as well as the debt ceilings. With consideration of the current usage on Aave and existing liquidity, we recommend implementing the following updates:

  1. Set supply caps at the current supply in each deployment
  2. Set borrow cap at the current borrow in each deployment
  3. Set Debt Ceiling at 2*(Liquidity within LB range / MAI LT)

Note: Final recommendations will be rounded for simplicity

DEX Liquidity


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Chain Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap Current Debt Ceiling ($) Recommended Debt Ceiling ($)
Arbitrum 4,800,000 325,000 2,400,000 250,000 1,200,000 100,000
Avalanche 700,000 20,000 460,000 10,000 2,000,000 10,000
Optimism 7,600,000 650,000 2,500,000 525,000 1,900,000 130,000
Polygon 2,200,000 900,000 1,200,000 700,000 2,000,000 180,000

Note: Given the current usage on Polygon, these recommendations effectively disable further usage of MAI as collateral.

Next Steps

Following community feedback and barring any objections, we ask to submit the ARFC via the [ARFC] Direct-to-AIP Framework


Chaos Labs has not been compensated by any third party for publishing this ARFC.


Copyright and related rights waived via CC0


The ACI is supportive of this proposal.

We are supportive of this proposal.


Glad to see this proposal go up. QiDao has been in contact with Aave DAO members about making this adjustment. Fully in favor of the proposal.

It is important to note that liquidations, though very few in number, have occurred with no issue for MAI-related loans on Aave.

We have created a Snapshot for the community to vote on for the Avalanche updates, starting in 24h. If the Snapshot vote is succesfull, the changes will be updated via the Guardians.

We will shortly post the AIP for the updates Optimism, Arbitrum and Polygon

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AIP-279 has been published and voting starts in 24h.

Thank you in advance for your participation in the vote.

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