[AAVE] Borrow Cap Reductions on Aave V3 Ethereum
Simple Summary
Reduce Borrow Caps for long-tailed assets on Aave V3 Ethereum
Motivation
As part of our ongoing 2 strategy to minimize theoretical exposure to long-tailed debt on Aave, this proposal aims to mitigate the impact of volatility in debt assets further by implementing a substantial reduction in Borrow Cap values. Borrowing these assets typically yields minimal revenue but can pose significant risks, particularly in scenarios where liquidating these positions necessitates obtaining the underlying asset during a large pump. Given the recent upward volatility in asset prices, we propose a refined methodology for determining and implementing these Borrow Cap reductions. This approach aims to enhance the protocol’s resilience and stability amidst dynamic market conditions, safeguarding the interests of Aave users and stakeholders.
Specification
| Asset | Current Borrow Cap | Recommended Borrow Cap | | -- | |
- | | MKR | 3k | 1.98k | | LDO | 3m | 1.5m | | UNI | 500k | 330k | | RPL | 480k | 316.8k | | SNX | 1.1m | 150k | | FXS | 500k | 330k | | CRV | 5m | 2.75m | | STG | 5.5m | 3.2m | | KNC | 650k | 350k | | 1INCH | 720k | 475.2k | | BAL | 370k | 244.2k |
References
- Implementation: AaveV3Ethereum
- Tests: AaveV3Ethereum
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
Off-Chain Vote
YAE
10 HVAXVC83.3%
NAY
2 HVAXVC16.7%
Timeline
Apr 04, 2024Proposal created
Apr 04, 2024Proposal vote started
Apr 06, 2024Proposal vote ended
Apr 03, 2026Proposal updated