# \[ARFC\] Chaos Labs Risk Parameter Updates - sAVAX LT/LTV Adjustment **URL:** \ **Category:** Governance\ **Created:** [September 10, 2024, 7:07pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-parameter-updates-savax-lt-ltv-adjustment/18995 "2024-09-10T19:07:30Z")\ **Posts on this page:** 3\ **Page:** 1
**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 10, 2024, 7:07pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-parameter-updates-savax-lt-ltv-adjustment/18995/1 "2024-09-10T19:07:30Z")
## Summary A proposal to increase sAVAX’s liquidation threshold and LTV on Aave V3 Avalanche. ## Motivation sAVAX is currently configured with a liquidation threshold (LT) of 45% and max loan-to-value (LTV) of 40%. Following our observations and simulations, we believe increasing the LT and LTV for this market is prudent. sAVAX’s average market cap over the past 180 days is $257M, and its daily average volume is $3.1M. It has registered a daily annualized volatility of 90.88%, a 30-day annualized volatility of 74.11%, and its largest single-day price drop was 14.5%. ![image - 2024-09-10T220448.350](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e0c90c050458c93f353d4c000d7f018181c785f2.png) Its supply is well distributed, with all but two of the top 10 suppliers leveraging the asset with WAVAX. ![image - 2024-09-10T220451.011](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/1/166ed7e0b70f104d4e9be2377a5987f182abfd6d.png) Supply has been trending upward since the end of July. ![image - 2024-09-10T220453.826](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/3/330b03fe53f8102fbbda7903293a4098e5e69da5.png) 95.6% of the value of assets borrowed against sAVAX is WAVAX in E-Mode. USDC is the most popular non-E-Mode asset borrowed. ![image - 2024-09-10T220456.605](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/c/cbe1574692f05f1dff0b0c0288266236f8897c7e.png) ## Specification Given these observations, we recommend increasing sAVAX’s LTV and LT and increasing its LTV in E-Mode by a small amount. | Asset | Chain | Market | Current LTV | Recommended LTV | Current LT | Recommended LT | | --- | --- | --- | --- | --- | --- | --- | | sAVAX | Avalanche | Main | 40% | 50% | 45% | 55% | | sAVAX | Avalanche | E-Mode | 92.5% | 93% | 95% | - | # Next Steps 1. Following community feedback, submit the ARFC for a snapshot vote for final approval. 2. If consensus is reached, submit an Aave Improvement Proposal (AIP) to implement the proposed updates. # Disclaimer Chaos Labs has not been compensated by any third party for publishing this ARFC. # Copyright Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain) ---
**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 17, 2024, 8:16am UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-parameter-updates-savax-lt-ltv-adjustment/18995/2 "2024-09-17T08:16:30Z")
We have published a [Snapshot](https://snapshot.org/#/aave.eth/proposal/0x79d53b646cbada43fca9468df9c9ecbbaab42f9f4f17691cbdf216b21f6c21bb) for the community to vote on, starting in 24h. We thank you in advance for your participation in the vote. ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [October 17, 2024, 8:17am UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-parameter-updates-savax-lt-ltv-adjustment/18995/3 "2024-10-17T08:17:11Z")
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