[ARFC] Gauntlet Recommendation on freezing CRV for Aave v2 Ethereum

Given V2 risk levers, the market, and recent user activity, LT reductions are the most effective lever in mitigating CRV risk and exposure.

In past proposals, we have not supported freezing the CRV markets. We stand behind those recommendations. Enabling the largest account to increase HF via top-ups while protecting against liquidations has been critical during market volatility.

However, at present, market conditions and the wallet’s risk profile have changed significantly, and now, there’s a case to be made for freezing the CRV market. Our previous considerations and concerns remain, and we believe that LT reductions, will be sufficient and most effective in de-risking the market. With that said, we do not strongly oppose this proposal.

It’s noteworthy to highlight that the user has been proactively repaying his debt and redeeming his CRV position, over 44M USDT and 148M CRV, respectively. As we observed in the past, where the user supplied 40M CRV just hours before the November freeze proposal, pushing for a market freeze could lead to maximizing supply on Aave, thereby nullifying the freeze’s intended impact.

  • Without a market freeze, the user can supply CRV on V2. However, our apprehension lies in the potential of inadvertently pushing the user into making impetuous decisions, altering their engagement strategy with Aave.
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