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.
| Asset | Chain | Market | Current LTV | Recommended LTV | Current LT | Recommended LT |
|---|---|---|---|---|---|---|
| sAVAX | Avalanche | Main | 40% | 50% | 45% | 55% |
| sAVAX | Avalanche | E-Mode | 92.5% | 93% | 95% | - |
| WAVAX | Avalanche | E-Mode | 92.5% | 93% | 95% | - |
References
- Implementation: AaveV3Avalanche
- Tests: AaveV3Avalanche
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.