Chaos Labs - Monthly Community Update

November-December 2022

Overview

Chaos Labs is happy to share our first community update. In this update, we will highlight the past month’s activities and proposals and share our planned work moving forward.

Highlights

What’s Next

In the coming month, the Chaos team will be focused on a few areas:

  • Ongoing and proactive risk management in v2 and v3 markets
  • Supporting the deployment of v3 Ethereum
    • Initial risk parameter recommendations for the assets to be deployed on the network. We are working closely with the BGD team and other protocol contributors and shared our initial methodology and recommendations with the community. In the coming weeks, the community will decide on the initial assets and risk parameters for the deployment launch.
    • Discussion and research on risk analysis regarding the upcoming GHO launch - more on this to come over the coming weeks.
  • Parameter Recommendation Dashboard - we are in the final stages of work on all fronts (data, infra, UI) with planned delivery in 3-4 weeks.
  • We put forward a proposal to formally cover v2 markets and include proactive risk analysis and management while encouraging and supporting a safe migration to the upcoming Ethereum v3 deployment - the full details can be found here. After passing the initial Snapshot, we will formally post an AIP the first week of January.

We thank the community for the support, feedback, and involvement over this past eventful month. We invite the community to reach out with any question, feature request, or any other concern!

11 Likes

January 2023

Overview

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

Highlights

  • Following a detailed community discussion around the launch of Ethereum V3, our proposal for initial onboarded assets was chosen by the community. We are super excited about the launch of V3 on Ethereum and looking forward to continuously amending risk parameters and adding new assets to the deployment.
  • Suggested a framework for collaboration between Aave risk managers. This framework aims to create clarity for the Aave community around risk-related items while maximizing the advantages of multiple risk managers in the protocol.
    • The Chaos and Gauntlet (@paulieJ @deepa) teams have been utilizing this framework as a basis for our collaboration. We have set up open communication lines, bi-weekly syncs, and a shared work tracker and are working on providing clear proposals and recommendations for the community.
    • The teams collaborated and proposed joint recommendations for the initial parameters of the cbETH and rETH listings to Ethereum V3.
    • Published a community framework for recommending risk parameters for new asset listings.
  • Supported @llama on the CRV Interest Rate Curve Upgrade proposal, utilizing our supply and borrow cap methodologies to recommend updated caps for CRV on Polygon V3.
  • Provided analysis and recommendation for a supply cap for AAVE on Optimism V3. The community decided to move forward with Gauntlet’s proposal to reduce immediate tail risk, which is planned to be followed by a more comprehensive community discussion around methodology assumptions and community risk appetite.
  • Our proposal to formally cover V2 markets and include proactive risk analysis and management while encouraging and supporting a safe migration to the upcoming Ethereum V3 deployment was approved by the community. We thank the community for this vote of confidence in Chaos Labs.

What’s Next

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

  • Optimization of risk parameters following the launch of our V3 Monte Carlo simulation framework

  • V2 → V3 transition:

    • Methodically amending asset parameters to incentivize new users to migrate accounts to V3.
    • Helping analyze incentive (both treasury- and parameter-managed) schemes to incite account transitions.
  • Analysis and parameter recommendations for new assets and markets:

    • wstETH (V3 Arbitrum), sfrxETH (V3 Ethereum), LUSD (V3 Ethereum) - working on providing risk parameter recommendations for the said assets.
    • Metis and Celo networks - working on providing recommendations on the initial list of assets and parameter configurations to allow a final Snapshot to approve the deployment.
  • Discussion and research on risk analysis regarding the upcoming GHO launch

1 Like

February 2023

Overview

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

Highlights

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.
1 Like

March 2023

Overview

This update highlights the past month’s activities and proposals and shares our planned work.

Highlights

  • USDC depeg - following the USDC depeg, the Chaos team started a “war room” to monitor and analyze the markets while providing community recommendations to mitigate risk. The summary of events can be found in our blog post.
    • We published our evaluation of the stablecoin e-Mode category. In this analysis, we examined several alternatives to mitigating future shortfalls due to stablecoin depegs while examining their impact on risk and protocol reward.
  • GHO
    • Provided our analysis and recommendations for the GHO genesis parameters, including bucket capacity, borrowing rates, and target DEX liquidity figures.
    • Launched the GHO Risk Monitoring Dashboard. This new dashboard, currently supporting the Goerli test net version of GHO, provides real-time monitoring of the stablecoin and allows users and developers to dive deep into GHO data and usage. For more details and product run-through, please read our dedicated blog post.

What’s Next

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

April 2023

Overview

This update highlights the past month’s activities and proposals and shares our planned work.

Highlights

What’s Next

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

  • Publish Chaos Labs’ IR Curves methodology
  • Community plan for V2 → V3 migration as described here
  • Continuous optimization of risk parameters on V3 deployments
    • Integrate and support V3 Ethereum into the Chaos Labs Parameter Recommendation Platform.
  • Adding features and improvements to the Chaos Risk Monitoring Platform to improve community engagement.
  • Analysis and parameter recommendations for new assets and markets.
1 Like

May 2023

Overview

This update highlights the past month’s activities and proposals and shares our planned work.

Highlights

What’s Next

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

  • Publish Chaos Labs’ IR Curves methodology
  • Community plan for V2 → V3 migration as described here
  • Continuous optimization of risk parameters on V3 deployments
    • Integrate and support V3 Ethereum into the Chaos Labs Parameter Recommendation Platform.
  • Adding support for Polygon and Avalanche V2 on the Chaos Risk Monitoring Platform to improve community engagement.
  • Analysis and parameter recommendations for new assets and markets.
2 Likes

June 2023

Overview

This update highlights the past month’s activities and proposals and shares our planned work.

Highlights

What’s Next

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

  • Continuation of the community plan for V2 → V3 migration as described here
  • Additional V2 risk parameter updates to gradually reduce capital efficiency across V2 collateral assets.
  • Continuous optimization of risk parameters on V3 deployments.
  • Analysis and parameter recommendations for new assets and markets.
2 Likes

July 2023

Overview

This update highlights the past month’s activities and proposals and shares our planned work.

Highlights

  • On the weekend of July 22nd, the MAI token underwent considerable fluctuations, with the price dropping to a low of nearly $0.91. Even though we didn’t recommend immediate actions, we proposed a measure to curtail the exposure on Aave while the market continues to evolve. This suggestion entailed drastically reducing supply and borrow caps as well as debt ceilings across all applicable deployments (Avalanche, Optimism, Arbitrum, Polygon).

Untitled - 2023-08-02T130936.645

What’s Next

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

  • GHO - following the launch of GHO and initial discussion surrounding the GSM, GHO Steward, Liquidity Pools, and more, we are prepared to support the community on all GHO-related initiatives.
  • Continuation of the community plan for V2 → V3 migration as described here
  • Continuation of the V2 risk parameter updates to gradually reduce capital efficiency across V2 collateral assets.
  • Continuous optimization of risk parameters on V3 deployments.
  • Analysis and parameter recommendations for new assets and markets.
2 Likes

August 2023

Overview

This update highlights the past month’s activities and proposals and shares our planned work.

Highlights

What’s Next

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

  • GHO - Following the launch of GHO and initial discussion surrounding the GSM, GHO Steward, Liquidity Pools, and more, we are prepared to support the community on all GHO-related initiatives.
  • Continuation of the community plan for V2 → V3 migration as described here
  • Continuation of the V2 risk parameter updates to gradually reduce capital efficiency across V2 collateral assets. The AIP for the most recent proposal will be published shortly
  • Continuous optimization of risk parameters on V3 deployments.
  • Analysis and parameter recommendations for new assets and markets.
3 Likes