Author: ACI (Aave Chan Initiative)

Date: 2024-11-06

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Risk Parameters have been updated accordingly with Risk Service Providers feedback 2024-11-20

Summary

This proposal aims to enable tBTC/WBTC liquid E-Mode for the Main Instance. By implementing this change, we seek to enhance capital efficiency for borrowers using tBTC/WBTC as collateral, particularly for borrowing other stablecoins.

Motivation

The motivation behind this proposal stems from several key factors:

• High Utilization: tBTC/WBTC has demonstrated significant usage as collateral for borrowing stablecoins on the platform.
• Capital Efficiency: Enabling liquid E-Mode for tBTC/WBTC will allow borrowers to substantially improve their capital efficiency when using this asset as collateral.
• Controlled Growth: Liquid E-Mode provides a mechanism for more precise control over the growth and borrow demand in relation to the overall stablecoin liquidity within Aave v3 on Mainnet.
• Enhanced Borrowing Capacity: This change will enable users to borrow larger amounts of other stablecoins against their tBTC/WBTC collateral, potentially increasing platform utilization and revenue.

By implementing this proposal, we aim to optimize the use of tBTC/WBTC within the Aave ecosystem, attracting more liquidity for stablecoins.

Specification

This proposal will add tBTC/WBTC liquid E-Mode

Risk Parameters have been updated 2024-11-20 as per latest feedback provided by Risk Service Providers.

tBTC/WBTC E-Mode

Parameter	Value	Value
Asset	tBTC	WBTC
Collateral	Yes	No
Borrowable	No	Yes
Max LTV	93%	-
Liquidation Threshold	95%	-
Liquidation Bonus	1.50%	-

Useful links

BGD. Aave v3.2: Liquid Emodes

ARFC Snapshot

Github

AIP

Disclaimer

This proposal is directly powered by ACI (Aave Chan Initiative). ACI did not received compensation for creation of this proposal.

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.