# \[ARFC\] Update AAVE Token LTV/Liquidation Percentages

**URL:** <https://governance.aave.com/t/arfc-update-aave-token-ltv-liquidation-percentages/20973>\
**Category:** Governance\
**Created:** [February 7, 2025, 2:48pm UTC](https://governance.aave.com/t/arfc-update-aave-token-ltv-liquidation-percentages/20973 "2025-02-07T14:48:29Z")\
**Posts on this page:** 1\
**Showing post:** 6

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**Author:** ![LlamaRisk](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/llamarisk/32/12865_2.png) [@LlamaRisk](https://governance.aave.com/u/LlamaRisk)\
**Post date:** [February 11, 2025, 1:28pm UTC](https://governance.aave.com/t/arfc-update-aave-token-ltv-liquidation-percentages/20973/6 "2025-02-11T13:28:28Z")

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> [@MarcZeller](#):
>
> we are in favor of replicating changes on Arbitrum to reflect our alignment with this L2 and encourage Aave users migration from Polygon to a more friendly L2.

We also support increasing the LTV and LT on Arbitrum if it serves a strategic purpose. We note that there is approximately $1.3M worth of liquidity within the liquidation bonus (10%).

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/a/a4b93cca7ca24e4d6634c3483e818033a5db999c.png)  
_Source: AAVE to ETH Token Swap Modelling, [DeFiLlama Liquidity](https://defillama.com/liquidity), February 11th, 2025_

We also note that the supply cap might need to be raised if users transition to Arbitrum to benefit from more permissive parameters. In such a case, current liquidity provision indicates that a supply cap increase would be feasible.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/d87b769816189b8ec219526438173884849609c4.png)  
Source: [onaave](https://dash.onaave.com/reserve/42161-0xba5ddd1f9d7f570dc94a51479a000e3bce967196-aave-v3/), February 11th, 2025

Below we show a simulation of a 30% AAVE drawdown under current (70%) and proposed (75%) LT.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/5/5ec785b624d28a4022cc19802257e64277029101.png)  
_Simulation of 30% drawdown at current LT (70%), [Chaos Labs](https://community.chaoslabs.xyz/aave/risk/risk-explorer), February 11th, 2025_

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/d458a488bfefa6f4a4a1586d760ddd301fc91b39.png)  
_Simulation of 30% drawdown at proposed LT (75%), [Chaos Labs](https://community.chaoslabs.xyz/aave/risk/risk-explorer), February 11th, 2025_

We will update our proposed parameters in the original recommendation.

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_[View the full topic](https://governance.aave.com/t/arfc-update-aave-token-ltv-liquidation-percentages/20973)._