hvax.eth

[AAVE] Prime Instance - Restore ETH LTV

Voting ended about 1 year agoSucceeded

Simple Summary

This publication proposes restoring ETH’s LTV to 82% on the Prime instance of Aave v3.

Motivation

With the introduction of liquidity mining rewards for ETH deposits on Prime, some users exploited wETH/wETH leverage to farm rewards. In response, ETH’s LTV was set to 0, preventing new ETH collateral positions while preserving existing user positions.

Transitioning from direct liquidity mining emissions to a periodic Merkl distribution ensures that users leveraging wETH/wETH can be disqualified from rewards. By introducing a qualification criteria, incentives are directed towards users who engage with the protocol as intended.

This proposal focuses on re-enabling ETH collateral positions by restoring the LTV to 82%.

Specification

The LTV for ETH on Prime is to be amended as outlined below:

| Parameter | Current | Proposed | | : -: | : --: | : : | | LTV | 0.00% | 82.00% |

The ETH Correlated eMode category is to be amended as outlined below:

| Parameter | Value | Value | | : --: | : -: | : -: | | Asset | wETH | wstETH | | Collateral | No | Yes | | Borrowable | Yes | No | | LTV | 93.50% | 93.50% | | LT | 95.50% | 95.50% | | Liquidation Penalty | 1.00% | 1.00% |