Thank you all for your insights and discussions on this matter. I’d like to share a few thoughts from the perspective of the Aave-Chan Initiative (ACI).
Firstly, it’s important to remember the core ethos of DeFi, which is neutrality. The protocol should function effectively regardless of whether a pool has one large position or a thousand smaller ones with similar liquidation ranges. The intention of users or what they do with their funds is not our primary concern. Users should be free to utilize the protocol as they see fit.
Secondly, we need to be cautious about implementing “solutions” that could potentially do more harm than good. The user in question currently has a healthy Health Factor. Artificially increasing the odds of liquidation by increasing the Reserve Factor (RF) or lowering the Liquidation Threshold (LT) may not be the most sensible approach.
Lastly, we should generally encourage the use of Aave V3 over V2. One of the reasons this large position grew in V2 was due to overly conservative CRV parameters in V3, which prevented a seamless migration. V3 has caps that allow for more granular management, which is a significant advantage.
In conclusion, while we should certainly monitor and manage risks, it’s crucial that we do so in a way that respects the principles of DeFi and the functionality of our protocol. In our opinion, there is not a significant need for governance to enforce any kind of action at this point.
We would like to clearly state that we will vote no to any rushed plan that just reacts to social media chatter.