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Proposal overview

Risk Parameter Updates for Aave v2 Ethereum Liquidty Pool

Executed

Executed on 

Nov 30, 2022

Simple Summary

In response to recent market events and resulting discussion on the governance forum, Llama and Chaos Labs propose to make a series of parameter changes to the Ethereum Aave v2 Liquidity Pool.

Abstract

This proposal presents an alternative pathway forward to AIP-121. The community can elect to Disable Borrowing whilst retaining the ability to Deposits assets across the majority of Reserves rather than Freezing as outlined in AIP-121.

This proposal is a collaborative effort between Llama and Chaos Labs and reflects the communities governance forum discussion.

Motivation

In response to recent market events and the continued contraction of liquidity across markets, this proposal seeks to reduce the risk profile across many higher volatile assets. AIP-121 presents an opportunity to Freeze many Reserves, whereas this proposal intends to Disable Borrowing whilst retaining the ability to deposit assets.

AIP-121 is a more conservative response relative to this proposal. It is likely, LTV and LT thresholds for highly liqudity assets will also require amending in the near future. This will be managed via a separate submission.

Specification

The following risk parameter proposal are presented below:

Implementation

This proposal will reconfigure the following asset Reserves:

  • YFI
  • CRV
  • ZRX
  • MANA
  • 1INCH
  • BAT
  • sUSD
  • ENJ
  • GUSD
  • AMPL
  • RAI
  • USDP
  • LUSD
  • xSUSHI
  • DPI
  • renFIL
  • MKR
  • ENS
  • LINK
  • UNI
  • SNX

This proposal is written in an atomic manner that will unfreeze reserves in case AIP-121 gets executed before.

To achieve this, freezeReserve(address asset), unfreezeReserve(address asset) and disableBorrowingOnReserve(address asset) will be performed via the PoolConfigurator for each asset respectively to ensure a predictable final state.

POOL_CONFIGURATOR.freezeReserve(address asset) POOL_CONFIGURATOR.unfreezeReserve(address asset) POOL_CONFIGURATOR.disableBorrowingOnReserve(address asset)

Implementation can be found here

Copyright

Copyright and related rights waived via CC0.

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Voting results

YAE

647,906

AAVE

99.82%

NAY

1,152

AAVE

0.18%

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Votes

State
Executed

Executed on 

Nov 30, 2022
Quorum
Reached
Current votes

Required

647.90K

320.00K

Differential
Reached
Current differential

Required

646.75K

80,000.00

Total voting power

16,000,000

Proposal details

Created

Block

25 Nov 2022, 16:51 UTC +00:00

16048305

Started

Block

26 Nov 2022, 16:58 UTC +00:00

16055505

Ended

Block

29 Nov 2022, 08:58 UTC +00:00

16074705

Executed

30 Nov 2022, 19:03 UTC +00:00

Author

Llamaxyz & Chaos Labs (defijesus, Matthew Graham, Omer Arie Goldberg)