Chaos Labs released a proposal proposing to adjust seven aggregate risk parameters for four Aave V3 Ethereum assets, including loan-to-value ratios, liquidation thresholds, and liquidation bonuses.
The proposal stated that Chaos’ simulation results revealed opportunities to optimize the parameters of DAI, wstETH, rETH and cbETH on V3 Ethereum, thereby improving the system’s capital 95% of protocol losses) and EVaR (Extreme VaR, 99% of protocol losses due to bad debts on undercollateralized accounts within 24 hours) are negligible.
Additionally, for wstETH, rETH, and cbETH, Chaos recommends adjusting the LTV, as the current spread between LTV and LT for these assets (initially set for the conservative V3 Ethereum launch) is too large and unreasonable, and the new spread Will be similar to the spread of WETH.