Chaos Labs Risk Parameter Updates - sAVAX LT/LTV Adjustment














Chaos Labs Risk Parameter Updates - sAVAX LT/LTV Adjustment







Author

Aave Chan Initiative

Creator

0x57ab7ee15cE5ECacB1aB84EE42D5A9d0d8112922

Simple Summary

A proposal to increase sAVAX’s liquidation threshold and LTV on Aave V3 Avalanche.

Motivation

sAVAX is currently configured with a liquidation threshold (LT) of 45% and max loan-to-value (LTV) of 40%. Following our observations and simulations, we believe increasing the LT and LTV for this market is prudent.

sAVAX's average market cap over the past 180 days is $257M, and its daily average volume is $3.1M. It has registered a daily annualized volatility of 90.88%, a 30-day annualized volatility of 74.11%, and its largest single-day price drop was 14.5%.

Its supply is well distributed, with all but two of the top 10 suppliers leveraging the asset with WAVAX.

Supply has been trending upward since the end of July.

95.6% of the value of assets borrowed against sAVAX is WAVAX in E-Mode. USDC is the most popular non-E-Mode asset borrowed.

Specification

Given these observations, we recommend increasing sAVAX’s LTV and LT and increasing its LTV in E-Mode by a small amount.

AssetChainMarketCurrent LTVRecommended LTVCurrent LTRecommended LT
sAVAXAvalancheMain40%50%45%55%
sAVAXAvalancheE-Mode92.5%93%95%-
WAVAXAvalancheE-Mode92.5%93%95%-

References

Copyright

Copyright and related rights waived via CC0.

by BGD Labs