Chaos Labs - Monthly Community Update

[ChaosLabs]

February 2023

Overview

In this update, we highlight the past month’s activities and proposals and share our planned work moving forward.

Highlights

• We launched the Chaos Labs Parameter Recommendation Platform, making it easier for users to identify the tradeoffs between risk parameters. This platform will further contribute to a better understanding and transparency of the parameter recommendation process. We invite the community to read our full in-depth blog post and portal run-through here.
• Added support for Ethereum V3 into the Chaos Risk Dashboard.
• Published our Updated Supply and Borrow Cap Methodology. We are in the process of formalizing a more robust supply and borrow cap methodology to serve the future needs of Aave V3, which we will complete in the coming weeks.
• Published seven proposals (list below) across V2 and V3 deployments for risk parameter updates, including - LT, LTV, LP, and Supply/Borrow Caps:
  • Proposals approved by governance:
    • [ARC] - Chaos Labs Supply and Borrow Cap Updates - Aave V3 Polygon and Arbitrum - 2023.02.07 - recommended updated supply and borrow caps for V3 assets that have reached over 85% utilization of either cap.
    • [ARC] - Supply Cap update sAVAX Avalanche V3 - recommended increasing the supply cap for sAVAX on Avalanche V3, which has reached 100% utilization.
    • [ARC] - Chaos Labs Risk Parameter Updates - Aave V3 Avalanche - 2023.02.07 - recommended increasing LTVs and LTs for WAVAX and LINK.e, resulting in improved capital efficiency of the system.
  • Proposals still in the Governance process:
    • [ARC] - Chaos Labs Risk Parameter Updates - MKR on Aave V2 Ethereum - 2023.02.17 - a proposal intended to reduce the viability of different attack vectors on V2 assets.
    • [ARC] - Chaos Labs Risk Parameter Updates - Aave V3 Arbitrum - 2023.02.20 - a proposal to increase LTVs and LTs for WBTC, WETH, USDC, and DAI on V3 Arbitrum.
    • [ARC]- Chaos Labs Risk Parameter Updates - Aave V3 Ethereum - 2023.02.22 a proposal to increase LTVs and LTs for USDC and DAI on V3 Ethereum.
    • [ARC] - Chaos Labs Supply and Borrow Cap Updates - Aave V3 - 2023.02.24 a proposal to update supply and borrow caps for (1) V3 stablecoins that have excessive supply caps set and/or have no set borrow cap and (2) V3 assets that have reached over 75% utilization of either cap.
• Provided analysis and supported the following proposals:
  • wstETH on Arbitrum Aave V3
  • Aave V3 on Metis
  • Add LUSD to Aave Ethereum V3 pool
  • Add wstETH to Arbitrum Aave v3
  • Increase borrow cap for MAI Aave Polygon V3
  • Increase supply cap for cbETH Aave Ethereum V3
  • Add USDT to Aave Ethereum V3 pool
  • Add support for BADGER on Aave V3
  • Onboarding sfrxETH from Frax Protocol to Aave V3 Ethereum Market
  • MaticX Polygon v3 Upgrade
  • Add support for Origin Dollar (OUSD) on Ethereum V3

What’s Next

In the coming month, the Chaos team will focus on the following few areas:

• Continuous optimization of risk parameters on V3 deployments

  • Integrate and add support for V3 Optimism and Polygon into the Chaos Labs Parameter Recommendation Platform.

• Discussion and research on risk analysis regarding the upcoming GHO launch.

• Analysis and parameter recommendations for new assets and markets.

  Current WIP:

  • UNI (V3 Ethereum), SNX (V3 Ethereum), YFI (V3 Ethereum), MKR (V3 Ethereum), and LDO (V3 Ethereum)- working on providing risk parameter recommendations for the said assets.
  • Analysis for adding cbETH to Ethereum-correlated E-Mode.