January 2024
Overview
This update highlights the past month’s activities and proposals.
Highlights
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AMPL borrow rate reductions - as detailed in the discussion initiated by BGD regarding the issues with AMPL token on V2 Ethereum, we have seen an abnormal exponential deviation within the AMPL market, particularly in the context of aAMPL/total supplied liquidity/vAMPL supply values. Although the exact cause of this shift is still under investigation, it appears linked to the unique aAMPL implementation. Specifically, the scaled total supply of the underlying AMPL in the market, and thus by proxy aAMPL supply, seems to rebase irrespective of the utilization rate, in addition to the high interest rates realized by the aAMPL. While the issue is still being investigated by the AMPL team, we recommended reducing the AMPL borrow rates to mitigate the accelerated growth of aAMPL supply.
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We’ve significantly enhanced the Chaos Labs GHO Risk Monitoring Portal, transforming it into a centralized hub for all things GHO. This revamped portal is meticulously designed to house all GHO-related data, charts, and analytics under intuitive tabs for Overview, Risk, and Liquidity. It delivers a comprehensive analysis of GHO, showcasing everything from price and market cap to trading volume, the amount borrowed, and a detailed breakdown of collateral assets. With sophisticated charts revealing GHO’s liquidation risks, the major token holders, borrowing trends on Aave, and the on-chain liquidity across diverse DEXes, these upgrades elevate the portal’s capacity to offer profound insights into the market dynamics, risk assessments, and liquidity scenarios of GHO.
- We supported the recent launch of BNB Chain with initial parameter recommendations and its integration into our Risk Portal post-launch. As usage on the deployment continues to grow we are prepared to support with parameter optimization, supply and borrow cap recommendations, and new asset listings.
- We published the following proposals for risk parameter updates:
- [ARFC] AMPL Interest Rate Updates on V2 Ethereum
- [ARFC] Chaos Labs Risk Parameter Updates - Increase Debt Ceiling for SNX and MKR on V3 Ethereum - 01.31.2024
- [ARFC] V2 Ethereum LT Reductions - 01.30.2024
- [ARFC] - Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on V3 Ethereum - 01.12.2024
- [ARFC] - Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on V3 Arbitrum - 01.11.2024
- [ARFC] - Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on V3 Ethereum - 01.05.2024
- [ARFC] - Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on V3 Ethereum and Arbitrum - 01.03.2024
- [ARFC] Recommendation to freeze and set LTV to 0 on low-cap Aave v3 Polygon collateral assets
- Provided analysis and supported the following proposals:
- BGD. Correlated-asset price oracle
- [ARFC] BGD. Risk Steward Phase 2: RiskSteward
- [ARFC] Add sFRAX on Ethereum V3
- [ARFC] Onboard fdUSD to Aave v3 on BSC
- [ARFC] Add PYUSD to Aave v3 Ethereum Market
- [ARFC] Aave V3 Deployment on BNB Chain
- [ARFC] Update stETH and WETH Risk Params on Aave v3 Ethereum, Optimism and Arbitrum
- [ARFC] MaticX Supply Cap Increase in Polygon V3
- [ARFC] Gauntlet USDT Cap Recommendation on Ethereum Aave v3
- [ARFC] Gauntlet USDC.e Supply and Borrow Cap Recommendation on Optimism Aave v3
What’s Next
In the coming months, the Chaos team will continue its focus on the following areas:
- Correlated-asset price oracle - provide initial parameter recommendations
- GHO
- Continuation of the V2 risk parameter updates to gradually reduce capital efficiency across V2 collateral assets.
- Continuous optimization of risk parameters on all V3 deployments.
- Analysis and parameter recommendations for new assets and markets.