[ARFC] Generalized LT/LTV Reductions on Aave V3 Step 2 - 04/23/2024

Governance
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Summary

Reduce stablecoin LTs and LTVs across all markets.

Motivation

Following a successful implementation of Phase I of our plan to reduce stablecoin LTs and LTVs, we would like to propose the next phase. Additionally, we have updated our recommended final state for all associated stablecoins, with LTVs and LTs harmonized across all chains at 75% and 78%, respectively.

Please note that given the proposal to adjust DAI and sDAI risk parameters, it has been excluded from this proposal.

Step Two Recommendations

Ethereum

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $2,600 Yes
USDT 76% 75% 79% 78% $0 Yes
sDAI 63% 75% 77% 78% $0 Yes

Gnosis

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $0 Yes
sDAI 63% 75% 77% 78% $0 Yes

Base

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $3.80 Yes
USDbC 76% 75% 79% 78% $0.40 Yes

Scroll

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $103 Yes

Polygon

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $0 Yes
USDT 76% 75% 79% 78% $833 Yes
USDC.e 76% 75% 79% 78% $4,700 Yes

Arbitrum

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $0 Yes
USDT 76% 75% 79% 78% $5.30 Yes
USDC.e 76% 75% 79% 78% $1,000 Yes

Optimism

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $3,700 Yes
USDT 76% 75% 79% 78% $63 Yes
USDC.e 78% 75% 84% 80% $5,800 No

BNB

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 76% 75% 79% 78% $3,700 Yes
USDT 76% 75% 79% 78% $0 Yes

Avalanche

Asset Current LTV Recommended LTV Current LT Recommended LT New Liquidations Complete after Step 2?
USDC 80% 75% 85% 81% $23,700 No

Next Steps

Following community feedback, 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

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Hello,

echoing our previous comment considering the relative smaller size & business potential of sDAI as collateral, we suggest to revert their risk parameters on Ethereum & Gnosis markets to levels pre-AIP 87 & in sync with current proposal with 75% LTV & 78% LT

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We have updated the specification in the post to bring sDAI in line with other stablecoins.

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