Simple Summary

This publication proposes restoring ETH’s LTV to 82% on the Prime instance of Aave v3.

Motivation

With the introduction of liquidity mining rewards for ETH deposits on Prime, some users exploited wETH/wETH leverage to farm rewards. In response, ETH’s LTV was set to 0, preventing new ETH collateral positions while preserving existing user positions.

Transitioning from direct liquidity mining emissions to a periodic Merkl distribution ensures that users leveraging wETH/wETH can be disqualified from rewards. By introducing a qualification criteria, incentives are directed towards users who engage with the protocol as intended.

This proposal focuses on re-enabling ETH collateral positions by restoring the LTV to 82%.

Specification

The LTV for ETH on Prime is to be amended as outlined below:

The ETH Correlated eMode category is to be amended as outlined below:

References

• Implementation: AaveV3EthereumLido
• Tests: AaveV3EthereumLido Snapshot
• Discussion

Copyright

Copyright and related rights waived via CC0.