Gauntlet Recommendation: CRV Deprecation Schedule

The effort to unwind the CRV market is complex and should be collaborative. We’ve been advocating for LT reductions for CRV for months (here, here, here) and have already started a series of CRV LT reductions:

  1. [ARC] - Risk Parameter Updates for Aave v2 Ethereum - LTs and LTVs for Long Tail Assets (2022.12.04)
  2. [ARFC] - Chaos Labs Risk Parameter Updates - CRV Aave V2 Ethereum - 2023.06.15
  3. [ARFC] - Chaos Labs Risk Parameter Updates - CRV Aave V2 Ethereum - 2023.07.10

Additionally, there’s a dedicated thread to discuss this topic, which was shared with Gauntlet and additional community members hours before this post was published, which makes this even more bizarre.

photo_2023-08-08 15.41.54 (1)

Now let’s get technical. At worst, none of these conditions are met, and this plan affects no change. Adhering to a preset schedule could lead to a situation where if conditions are unmet, no changes are executed. Conversely, the LT reductions proposed could be overly conservative if we’ve set an upper bound that is no longer relevant. So far, we have every indication that the position holder is cooperative and willing to unwind the position, as over $30m debt was repaid last week, with significant CRV redeemed.

Per usual, we communicated our intentions, asking Gauntlet and other DAO contributors to collaborate. Our goal is to share a CRV wind-down plan that could culminate in community alignment, position holder collaboration and minimize community confusion.

Chaos has provided an alternative recommendation for a framework for future LT reductions, which can be found here. We appreciate the community feedback and discussion around this important topic. As suggested in this post, the community needs ample time to consider the alternative plans and advise not to rush to a Snapshot vote tomorrow.