An SVG of an eye

Proposal overview

Risk Parameter Updates 2021-10-14

Executed

Executed on 

Oct 22, 2021

Simple Summary

A proposal to adjust nine (9) total risk parameters across eight (8) Aave V2 assets including LTV, Liquidation Threshold, and Liquidation Bonus.

Abstract

This proposal is a batch update of three risk parameters to align with the the Moderate risk level chosen by the Aave community. These paramater updates are a continuation of Gauntlet's regular parameter recommendations, the latest being AIP-40: Risk Parameter Updates 2021-10-07.

Motivation

This set of parameter updates seeks to maintain the overall risk tolerance of the protocol while making risk trade-offs between specific assets. For more detail on Gauntlet's first two months of recommendations and their impact, please see Gauntlet's most recent Monthly Risk Report.

Specification

ParameterCurrent ValueRecommended Value
BAT Liquidation Threshold75%80%
CRV Loan To Value35%45%
CRV Liquidation Threshold55%60%
ENJ Loan To Value55%60%
REN Loan To Value50%55%
SUSHI Loan To Value30%45%
UNI Loan To Value55%60%
WBTC Liquidation Bonus7.5%6.5%
YFI Liquidation Bonus8%7.5%

See below volatility and exchange volume data from 10/07 to 10/14 that were important drivers for the updated parameter recommendations.

Symbol10-14 Volatility10-07 VolatilityVolatility ChangeWeekly Average Daily Volume Change (%)
BAT0.9294402621.26231086-0.332870598-5.5534425
CRV1.6809648562.06913145-0.388166594-20.9446652
ENJ1.1658231761.684204979-0.518381803-27.1658359
REN1.8267138742.073377777-0.246663903-49.2642672
SUSHI1.5212035011.831060432-0.309856931-17.0524519
UNI1.3282925781.625790476-0.297497898-45.1124435
WBTC0.6947018530.83363382-0.13893196750.5601238
YFI1.0383569551.240436029-0.20207907481.6590629

Risk Dashboard

The community should use Gauntlet's Risk Dashboard to better understand the updated parameter suggestions and general market risk in Aave V2.

Implementation

The proposal sets the LTV, liquidation bonuses, and liquidation threshold ratios by calling configureReserveAsCollateral on the LendingPoolConfigurator contract at 0x311Bb771e4F8952E6Da169b425E7e92d6Ac45756, using the address and parameters specific to each token.

The full list of parameter updates can be found in the forum.

Copyright

Copyright and related rights waived via CC0.

Your voting info

Voting results

YAE

655.81K

100.00%

NAY

0

0%

State
Executed

Executed on 

Oct 22, 2021
Quorum
Reached
Current votes

Required

655.81K

320.00K

Differential
Reached
Current differential

Required

655.81K

327.90K

Total voting power

16,000,000

Proposal details

Created

Block

~ 18 Oct 2021, 09:59 pm

13444321

Started

Block

~ 18 Oct 2021, 09:59 pm

13444321

Executed

22 Oct 2021, 10:34 pm

Author

Nick Cannon, Watson Fu, Paul Lei

Forum discussion