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Title: [ARFC] Update stETH and WETH Risk Params on Aave v3 Ethereum, Optimism and Arbitrum Author: ACI (Aave Chan Initiative) Created: 2024-01-12

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Summary

This ARFC proposes to update sETH and WETH risk parameters on the Aave V3 Ethereum Mainnet, OP Mainnet and Arbitrum.

Motivation

We propose updating the stETH and WETH risk parameters to be optimal and competitive in the current market landscape. This will maintain Aave’s position as the prime liquidity protocol by increasing our protocol attractiveness for users looking to maximize their capital efficiency.

Specification

stETH E-Mode Ethereum

Update ETH-correlated E-Mode parameters with the following values.

Risk Parameter	Current Value	Proposed Value
Loan To Value (LTV)	90%	93%
Liquidation Threshold	93%	95%

We propose no changes to the stETH non-E-Mode parameters.

wstETH E-Mode Arbitrum

Update ETH-correlated E-Mode parameters with the following values.

Risk Parameter	Current Value	Proposed Value
Loan To Value (LTV)	90%	93%
Liquidation Threshold	93%	95%
Liquidation Bonus	2%	1%

We propose no changes to the stETH non-E-Mode parameters.

wstETH E-Mode Optimism

Risk Parameter	Current Value	Proposed Value
Loan To Value (LTV)	90%	93%
Liquidation Threshold	93%	95%

We propose no changes to the stETH non-E-Mode parameters.

WETH Ethereum

Risk Parameter	Current Value	Proposed Value
Reserve Factor	15%	10%
Optimal Ratio	80%	90%

Other parameters will remain unchanged.

WETH Arbitrum

Risk Parameter	Current Value	Proposed Value
Reserve Factor	15%	10%
Optimal Ratio	80%	90%

Other parameters will remain unchanged.

WETH Optimism

Risk Parameter	Current Value	Proposed Value
Reserve Factor	15%	10%
Optimal Ratio	80%	90%

Other parameters will remain unchanged.

Next Steps

1. Gather community feedback on this ARFC.
2. If consensus is reached, escalate this proposal to ARFC snapshot stage.
3. If ARFC snapshot outcome is YAE, escalate to AIP stage.

Disclaimer

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

Copyright

Copyright and related rights waived via CC0.