Thanks for putting this forward @MarcZeller .
In the Chaos Labs LSD Methodology Update, we discussed updating the pricing of LSDs to utilize the primary exchange rate. Coupled with the implementation of the price sync adapter, this will decrease the likelihood of liquidations, thereby allowing for the adoption of more aggressive risk parameters and caps.
Currently, the only asset in the Ethereum-correlated E-Mode on V3 Ethereum, where the oracle isn’t pricing according to the primary market exchange rate, is cbETH (see BGD. Operational oracles update).
We recommend considering an increase in the LT of the E-Mode category only after ensuring all assets employ the primary exchange rate and the price sync adapter.
In addition, as we commented in the “killswitch” discussion, we recommend implementing a proof of reserve oracle or an alternative trigger mechanism as a backstop for a black swan event, limiting potential risk to the protocol. We advise against increasing the risk parameters in this post at this time until the discussion around emergency triggers and mechanisms is complete and the community has aligned on the desired solutions.