TechFlow reports, according to the Snapshot voting page, the Aave community has passed the ARFC proposal submitted by Chaos Labs with 99.99% approval. The proposal recommends lowering the liquidation threshold (LT) and loan-to-value ratio (LTV) for CRV on Aave V2 on Ethereum. This will reduce Aave's risk exposure on V2 Ethereum, resulting in a 3% decrease in both LT and LTV. If consensus is reached, an Aave Improvement Proposal (AIP) will be submitted to implement the suggested updates.
However, lowering the liquidation threshold may render user accounts eligible for liquidation upon approval, so the team aims to clarify the full impact at each step with the community. To minimize such impact, the proposal suggests achieving the target configuration through a series of incremental reductions, in line with the community-approved risk-averse framework, reducing by no more than 3% per AIP. To avoid liquidations, Chaos Labs will publicly communicate the planned revisions leading to on-chain execution as well as the list of affected accounts.
