Aave News: AIP-78, Liquidity Mining Evolution, Governance House,& More Ecosystem Updates

June 7th, 2022

Risk 🔎

Check out the Aave V2 Risk Dashboard by Gauntlet at gov.gauntlet.network/aave. Gauntlet has also launched the Aave Arc Risk Dashboard. The Gauntlet team is particularly keen on iterating on this dashboard for the community and would love feedback via this Google Form.

For more details on how Gauntlet manages market risk for Aave, please see Gauntlet’s Parameter Recommendation Methodology and Gauntlet’s Model Methodology.

Risk Parameter Updates:

Details can be found in this ARC

Gauntlet has postponed the parameter changes of AIP-78 to give the few (5) users additional time and notice to unwind positions that may be partially liquidated.

Given the current levels of risk in V2, our optimization engine recommends lowering liquidation threshold for LINK and WETH. As such, this set of parameter changes may partially force-liquidate a few recursive borrow users on V2. Although it is essential to recalibrate risk on Aave to avoid potential liquidation cascades and insolvency, after gathering community feedback, we have decided to postpone these parameter changes. Our analysis shows that the potential forced liquidations will be very small. Gauntlet values transparency and is drafting a communications framework to better notify users of parameter changes like these moving forward.

AIP-78 also included parameter changes to the Aave Arc market. These changes are independent and separate from the V2 parameter changes, so Gauntlet will put up another on-chain vote specifically for the Aave Arc parameter updates tomorrow, 6/7/2022.

Protocol 📰

Ernesto from BGD shared more insights on protocol risk management and why AIP-78 didn’t pass
After the introduction of boosted AVAX rewards, the amount of DAI supplied on the Avalanche Market is over $739 million at time of writing
Governance House, a group of ecosystem members who have been active in Aave governance gave their official introduction on the governance forum
BGD shared a migration plan for upgrading the AAVE/WETH aBPT pool from V1 to V2
Gauntlet will be extending their risk management to include Arc, the permissioned version of Aave for institutions

Ecosystem 🧉

Gitcoin Round 14 starts in 2 days and Aave Grants is excited to be sponsoring the Crypto Advocacy Cause Round 🤖🌎****
Atlendis (formerly JellyFi), one of the first Aave Grant recipients, dropped an update on the governance forum including some of the features you can expect in their V1 🚀
Increment shared their May update which includes the status of their v2 beta and a promotion with Chainlink ⛓
Check out Projection Finance to see the impact a price movement will have to your health factor 🎥
Good Ghosting announced their Summer Savings Tournament 👻