[ARFC] Increase WETH Optimal Ratio to 90% on all Aave markets

Author: ACI

Date: 2024-08-06

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Summary

The current proposal seeks to increase the WETH Optimal Ratio across all Aave markets where it is below 90%. This adjustment aims to enhance capital efficiency and ensure a more effective utilization of liquidity within the Aave protocol.

Motivation

Currently, the optimal usage ratios vary across different Aave instances, reflecting a balance between liquidity utilization and risk management. By increasing the optimal usage ratio for WETH to 90%, higher returns for liquidity providers and improved borrowing conditions for users can be achieved.

Specification

The existing optimal usage ratios for WETH across different markets are as shown in the image below and can also be checked in the Aave dashboard here.

This proposal will increase WETH Optimal Usage Ratio to 90% on the following markets which are currently at 80%, in order to unify them all:

Gnosis V3

Polygon V3

Metis V3

Base V3

Avalanche V3

Scroll V3

Disclaimer

ACI is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC.

Next Steps

1. If consensus is reached on this [ARFC], escalate this proposal to the Snapshot stage.
2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal.

Copyright

Copyright and related rights waived via CC0.