[ARFC] Update stETH and WETH Risk Params on Aave v3 Ethereum, Optimism and Arbitrum
Vote Result: YES
Rationale
While Gauntlet’s rationale to wait to change these parameters until the killswitch and the correlated-asset price oracle functionality is fair, from a ‘risk vs. reward’ perspective, it seems as if the primary point of consideration is the amount of value Aave will lose to competitors that have more aggressive parameters. In this case, the main question to be answered is ‘how much stETH/wETH will go to other venues compared to Aave if the parameters are less competitive than those of other venues’. While this is difficult to quantify, since the increases in the LT/LTV of these parameters are relatively low, the impact of the market price deviating from the price of ETH*exchange rate should not be too significant. From a risk perspective, moreover, with the current oracle configuration it does not make a large difference to have higher LTs. We agree with Gauntlet’s rationale to wait to change RFs.
Overall, we will vote YES in favour of this proposal in order to allow Aave to maintain parity with the more aggressive parameters on other venues.