# \[ARFC\] TUSD Offboarding Plan Part II **URL:** \ **Category:** Governance\ **Created:** [September 17, 2023, 11:31am UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863 "2023-09-17T11:31:01Z")\ **Posts on this page:** 6\ **Page:** 1
**Author:** ![MarcZeller](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/marczeller/32/7124_2.png) [@MarcZeller](https://governance.aave.com/u/MarcZeller)\ **Post date:** [September 17, 2023, 11:31am UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863/1 "2023-09-17T11:31:02Z")
> UPDATE: after discussions with @ChaosLabs the ACI will follow their recommendation to implement a 65% LT to avoid unnecessary liquidations. Proposal has been updated. * * * ## Title: [ARFC] TUSD Offboarding Plan Part II Author: Marc Zeller @marczeller - Aave Chan Initiative Date: 2023-09-17 ## Summary This ARFC proposes the continuation of the [TUSD offboarding plan](https://governance.aave.com/t/arfc-tusd-offboarding-plan/14008) from Aave V2 by adjusting its risk parameters, mirroring the approach taken in the “[ARFC] BUSD Offboarding Plan Part III”. ## Motivation This proposal is a continuation of stablecoins offboarding of the Aave V2 market. TUSD is proposed to adopt the “final stage” offboarding parameters to incentivize repayment and withdrawal of liquidity in Aave V2 Pool aBUSD will be withdrawn and converted to BUSD. This ARFC also aims to authorize the ACI to publish regularly “withdraw aToken” mechanical AIPs that have low governance value. Part of the success of these offboarding plans relies on maintaining the available liquidity low, adding pressure on borrowers, and incentivizing repayment or, if there’s a lack of reaction, accelerating HF decay to create liquidations. We believe that once the governance approves the offboarding plans and once an asset reaches the “final” stage of interestStrategy curve, there’s little to no governance value in going through the snapshot phase each time. A direct-to-AIP approach seems sufficient. ## Specification ### Risk Parameters Adjustment The risk parameters for TUSD on Aave V2 will be adjusted as follows: | Parameter | Previous Value | New Value | | --- | --- | --- | | Loan-to-Value (LTV) | 0% | 0% | | Liquidation Threshold (LT) | 75% | 65% | | Liquidation Bonus | 10% | 10% | | Reserve Factor | 95% | 99.9% | | uOptimal | 20% | 1% | | Base Rate | 0% | 100% | | Slope 1 | 10% | 70% | | Slope 2 | 200% | 300% | ## Disclamer The Aave-Chan Initiative is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC. ## Next Steps 1. Gather community feedback on this ARFC. 2. If community consensus is reached, escalate this proposal to the Snapshot ARFC stage 3. if snapshot outcome is YAE, escalate the proposal to AIP stage ## Copyright Copyright and related rights waived via CC0. ---
**Author:** ![EzR3aL](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/ezr3al/32/10721_2.png) [@EzR3aL](https://governance.aave.com/u/EzR3aL)\ **Post date:** [September 17, 2023, 8:56pm UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863/2 "2023-09-17T20:56:22Z")
Good evening, I’m supportive of this proposal. Doing everything to support V3 and and depreciate V2 only makes sense. Quick question, will the BUSD then also be converted to another stablecoin like GHO/USDC/USDT? ---
**Author:** ![TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/tokenlogic/32/8248_2.png) [@TokenLogic](https://governance.aave.com/u/TokenLogic)\ **Post date:** [September 17, 2023, 9:16pm UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863/3 "2023-09-17T21:16:23Z")
Hi @EzR3aL, In the coming days, we will be sharing a proposal that includes converting BUSD to GHO. The GHO will then be used to support future Aave DAO funding initiatives. ---
**Author:** ![0xkeyrock.eth](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/0xkeyrock.eth/32/6082_2.png) [@0xkeyrock.eth](https://governance.aave.com/u/0xkeyrock.eth)\ **Post date:** [September 19, 2023, 9:48am UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863/4 "2023-09-19T09:48:58Z")
We’re supportive of the off-boarding and indeed agree that Direct-to-AIP makes sense here. ---
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\ **Post date:** [September 21, 2023, 2:04pm UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863/5 "2023-09-21T14:04:17Z")
Gauntlet supports the proposed parameters. Given utilization at 100%, incentivizing TUSD debt repayment + reduction in TUSD collateralized debt will help reduce risk. The LT reduction from 75% to 65% may cause 5 accounts with ~$800 in borrow to become liquidatable. However, utilization has been 100%, which may limit liquidations. The LT reduction will also move a large $530k WETH borrower from HF 1.25 → 1.08. Borrow rate will more than double from 210% APR to 470%, implying TUSD debt per user will grow 1.3% per day. Analysis of top borrowers suggests the accounts may become liquidatable soon without debt repayment. | account | TUSD\_debt | days\_to\_liquidate | | --- | --- | --- | | 0xbab2051a457ad7338d8cfe142089e4062de48bd0 | ~850k | 115 | | 0x26563eedb269448352ba0663f2ee554fbd389296 | ~250k | 4 | | 0xbfb3c2cf90b17cabf40e73384e1fea5d64d83644 | ~200k | 18 | | 0xa33974eceac58a9f469f07e8e7aa08a467707aed | ~150k | 30 | ---
**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 21, 2023, 2:04pm UTC](https://governance.aave.com/t/arfc-tusd-offboarding-plan-part-ii/14863/6 "2023-10-21T14:04:22Z")
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