While freezing the asset may prevent the situation from worsening, it doesn’t alleviate the potential risk to the protocol. We are running simulations and analyses to devise a more structured strategy moving forward, to optimize the following:
- Gradually reducing the LT for CRV on V2 to reduce borrowing power and exposure.
- Lowering the debt ceiling on V3 - this action will reduce the potential exposure throughout the protocol.
- Raising the RF for CRV on V2 - this will have a very minor impact as borrows are currently disabled on V2, and the current total borrows stand at around 36M CRV. However, it will present a more appropriate reward for the protocol, given the risk the asset presents.