Chaos Labs - Monthly Community Update

May 2024

This update highlights Chaos Labs’ activities and proposals in May.


Stablecoin Interest Rate Curve Amendment

We proposed updates to the stablecoin interest rate curves on Aave V2 and V3 ahead of an anticipated decrease to the DSR. The proposal aimed to optimize interest rate parameters, thereby improving protocol efficiency and stability.

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sUSD Depeg Update

We published an analysis addressing the sUSD depeg event and providing recommendations. The report detailed the impact on the Aave ecosystem, including specific risks that arose during the depeg. We proposed several measures to mitigate future risks, including a freeze.

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Parameter Recommendations for sUSD on V3 Optimism

Following our assessment of the sUSD depeg, we recommended unfreezing the sUSD market on V3 Optimism. The proposal included adjustments to risk parameters, such as collateral factors and liquidation thresholds, to ensure market stability.

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Aave Deployment on Celo

We supported the proposal for deploying Aave on the Celo network. This deployment aims to expand Aave’s reach by integrating with Celo’s mobile-first platform, enhancing user access and network diversity. The initiative includes detailed technical specifications and deployment strategies to ensure a seamless integration.

Onboarding USDe to Aave V3 on Ethereum

We proposed onboarding USDe to Aave V3 on Ethereum. This addition is part of our efforts to diversify asset offerings on Aave, increasing liquidity and user options. The proposal outlines the benefits of including USDe, such as enhanced liquidity and expanded borrowing options, and provides a thorough risk assessment.

What’s Next

In the coming months, the Chaos team will continue its focus on the following areas:

  • GHO: ongoing recommendations, including parameters for cross-chain 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.
  • Further updates on the development of Chaos Labs Risk Oracles.
  • Analysis and parameter recommendations for new assets and markets.