Chaos Labs initiated a proposal to "reduce the CRV liquidation threshold on Aave V3 Polygon."

ChainCatcher message, Chaos Labs has initiated a proposal on the Aave governance forum to "Reduce the CRV liquidation threshold (LT) on Aave V3 Polygon."

Due to the significant decline in market liquidity for CRV, this proposal aims to address the issue by lowering the liquidation threshold for CRV on Aave V3 Polygon; its goal is to reduce CRV-related risk exposure and lower its borrowing capacity, thereby aligning it more accurately with existing market conditions and other deployed parameters. Chaos Labs suggests reducing its LT by 15%, from 65% to 50%.

Chaos Labs notes that the next step will be to submit an ARFC for snapshot voting for final approval based on community feedback. If consensus is reached, an Aave Improvement Proposal (AIP) will be submitted to implement the proposed updates.