[ARFC] - Configure Isolation Mode Borrowable Assets - V3 Ethereum


At the time of the launch of V3 Ethereum, no assets were configured as borrowable in Isolation Mode. In this proposal, Chaos Labs recommends enabling all stablecoins listed on V3 Ethereum as borrowable in isolation mode.


The motivation to list the stablecoins as borrowable assets in Isolation Mode is similar to previous deployments and is derived mainly from the low volatility of those assets. Given that Isolation Mode assets are susceptible to high volatility, we find it paramount to maintain the other side of the position stable in order to reduce liquidations and resulting bad debt.

Stablecoin Volatility

By observing chainlink prices of the 4 stablecoins on Ethereum V3, we have derived the following volatility measures:

daily annualized volatility 30-day annualized volatility
USDC 10.56% 16.92%
USDT 10.19% 7.94%
DAI 11.14% 16.3%
LUSD 7.07% 10.64%






We recommend listing USDC, USDT, DAI, and LUSD as assets allowed for borrowing in Isolation Mode on Ethereum V3.

This proposal aims to implement a single AIP, which will simply call setBorrowableInIsolation() on the assets on the PoolConfigurator contract.

Next Steps

We are targeting a Snapshot vote for next Monday, March 27th, 2023.


We have published a Snapshot for the community to vote on.

Start Date: Tuesday, Mar 28, 2023, 3:00 PM
End Date: Wednesday, Mar 31, 2023, 3:00 PM

Thank you in advance for your participation in the vote.


After a successful Snapshot, we have published AIP-194 , starting in 24h.

Thank you in advance for your participation in the vote.