I dont think freezing the CRV asset brings any benefit in this case. Even if we prevent this actor from borrowing more, we also prevent refillings, which are in any case legitimate and wouldnt help maintaining the position in an healthy state to begin with.
Setting the ltv to 0 in V2 is unfortunately not enforceable. The ltv 0 check can be circumvented using flashloans (this is not possible in V3).
I don’t see any reason to freeze the asset in V3, first the exposure is not as big to begin with, second the supply caps prevents from accumulating an excessive amount of CRV collateral, third there are many levers that we can change (lower the debt ceiling, further lower the supply cap, drop the ltv to 0) that unfortunately we dont have in V2 to prevent any risk.
The increase of the V2 reserve factor for CRV is an interesting approach, the protocol is currently sustaining a massive risk allowing this position and it’s not being paid nearly enough.
@gauntletnetwork a simulation of the potential bad debt risk from liquidating this position would be very helpful, do you have anything on that?