Chaos Labs Risk Parameter Updates - Aave V3 Arbitrum - 2023.02.20
Vote Result: YES
Rationale
Chaos Labs have proactively identified opportunities to change the LTV, LT, and LB for WBTC, WETH, USDC, and DAI on v3 Arbitrum, via which Aave can achieve improved capital efficiency with a negligible effect on projected VaR and EVaR. The borrow increase is projected to be ~$510,000. Further adding to the low risk nature of this proposal, Chaos have analysed the impact from any potential whale positions for any of the assets, and concluded that even if borrow usage for the 2 assets with whales on v3 Arbitrum (DAI and USDC) increased significantly and disproportionately, the on-chain liquidity for the assets should support their liquidations and not expose Aave to any bad debt. We will therefore vote YES in support of this proposal.