Chaos Labs proposes lowering CRV liquidation threshold on Aave V3 Polygon
Chaos Labs has proposed to lower the liquidation threshold (LT) for CRV on Aave V3 Polygon at the Aave governance forum. Due to the significant decrease in market liquidity for CRV, this proposal aims to address the issue by lowering the liquidation threshold for CRV on Aave V3 Polygon. Its goal is to reduce CRV-related risk exposure and lower its borrowing capacity, thereby aligning it more accurately with existing market conditions and other deployed parameters. Chaos Labs proposes to reduce the LT by 15%, from 65% to 50%. According to Chaos Labs, the next step is to submit an ARFC for snapshot voting based on community feedback to obtain final approval. If consensus is reached, an Aave Improvement Proposal (AIP) will be submitted to implement the proposed updates.
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