[AAVE] Chaos Labs Risk Parameter Updates - sAVAX LT/LTV Adjustment

Simple Summary

A proposal to increase sAVAX’s liquidation threshold and LTV on Aave V3 Avalanche.

Motivation

sAVAX is currently configured with a liquidation threshold (LT) of 45% and max loan-to-value (LTV) of 40%. Following our observations and simulations, we believe increasing the LT and LTV for this market is prudent.

sAVAX's average market cap over the past 180 days is $257M, and its daily average volume is $3.1M. It has registered a daily annualized volatility of 90.88%, a 30-day annualized volatility of 74.11%, and its largest single-day price drop was 14.5%.

Its supply is well distributed, with all but two of the top 10 suppliers leveraging the asset with WAVAX.

Supply has been trending upward since the end of July.

95.6% of the value of assets borrowed against sAVAX is WAVAX in E-Mode. USDC is the most popular non-E-Mode asset borrowed.

Specification

Given these observations, we recommend increasing sAVAX’s LTV and LT and increasing its LTV in E-Mode by a small amount.

| Asset | Chain | Market | Current LTV | Recommended LTV | Current LT | Recommended LT | | -- | | | -- | |

• | -- | | sAVAX | Avalanche | Main | 40% | 50% | 45% | 55% | | sAVAX | Avalanche | E-Mode | 92.5% | 93% | 95% | - | | WAVAX | Avalanche | E-Mode | 92.5% | 93% | 95% | - |

References

• Implementation: AaveV3Avalanche
• Tests: AaveV3Avalanche
• Snapshot
• Discussion

Copyright

Copyright and related rights waived via CC0.

https://app.aave.com/governance/v3/proposal/?proposalId=172