Chaos Labs - Monthly Community Update

[ChaosLabs]

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).

• Following the community discussion around the CRV market on Aave V2 in June, Chaos proposed an alternative strategy to freezing the market. Chaos has since put forward and executed 2 proposals to decrease LT and LTV for CRV on V2 Ethereum, with the community opting for a more aggressive reduction of these parameters in the most recent iteration.

  • Update: This proposal was canceled following the Vyper exploit and CRV price volatility.
  • Chaos Labs is continuing to evaluate the CRV market on Aave and has provided the following analysis and recommendations.

• We published the following proposals for risk parameter updates and new asset listings as part of the efforts for V2 → V3 migration.

  • [ARFC] - Chaos Labs Risk Parameter Updates - Aave V3 Ethereum - 2023.07.27
  • [ARFC] - Chaos Labs Risk Parameter Updates - CRV Aave V2 Ethereum - 2023.07.10
  • [ARFC] Chaos Labs Risk Parameter Updates - MAI on Aave V3 - 2023.7.23
  • [ARFC] Chaos Labs Risk Stewards - Increase Supply Caps RPL on V3 Ethereum
  • [ARFC] Chaos Labs Risk Stewards - Increase Supply Caps on V3 Metis - 07.26.2023
  • [ARFC] Chaos Labs Risk Stewards - Increase Supply Caps V3 Ethereum
  • [ARFC] Chaos Labs Risk Stewards - Increase Supply Caps on V3 Metis - 07.12.2023
  • [ARFC] Chaos Labs Risk Stewards - Increase Supply Caps WETH and CRV on V3 Polygon

• Provided analysis and supported the following proposals:

  • [TEMP CHECK] GHO Stability Module
  • [ARFC] Aave V3 Deployment on Base
  • [ARFC] Pyth to support AAVE on Optimism as a secondary oracle
  • ARFC: Gauntlet Supply Cap Updates for Avalanche, Arbitrum, Optimism v3

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.