[TEMP CHECK] Aave Protocol V4 Development Proposal

@maxicrouton
Details are outlined in the Aave 2030 Temp Check.

@Terminal
The specific implementation has not been built or decided yet, but our idea is that a cross-chain liquidity feature would have caps governed by the Aave DAO. We see this as an interesting opportunity for the DAO to research and consider an increase in the security for the cross-chain liquidity by introducing, for example, staking functionalities to secure these network-to-network movements.

We understand your reference to “Collateral switching to GHO”, to refer to the “GHO soft liquidations”. This idea is an opt-in feature for users. The scenario you provide would unlikely be ideal to demonstrate the potential use case of the feature. “Soft liquidations” would aim at lowering liquidation risk in case of market downturns, and restoring the collateral composition in case of a market recovery by providing maximized exposure to collateral while reducing hard liquidation risks. We imagine that whether or not a user would choose to use soft liquidations would depend on their assessment of risks based on their collateral composition and exposure.

@EzR3aL
“Soft liquidations” are an opt-in feature. The premium would act as additional risk-adjusted yield for suppliers and therefore, would also flow into the Reserve Factor.

On the question of “every action on the asset,” it is important to keep in mind that “actions” in this context refer to various governance actions, e.g., lowering caps. As this feature allows users to set up an automatic reaction if the governance acts on the risk parameters of a specific asset, there is no risk of manipulation you describe.

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