# Risk Parameter Updates for Aave V2 and Aave Arc (Fireblocks) 2022-05-26
AI summary
This proposal, authored by Gauntlet, suggests adjusting risk parameters for several cryptocurrencies on Aave V2 and Aave Arc (Fireblocks). Specifically, it aims to modify Loan-to-Value (LTV), Liquidation Threshold, and Liquidation Bonus for three assets on Aave V2, and LTV and Liquidation Threshold for one asset on Aave Arc. These changes are based on recent market data and Gauntlet's simulation engine, aligning with the Aave community's 'Moderate risk level' strategy.
If passed, the changes will lower the liquidation threshold for LINK and WETH, potentially leading to more liquidations for borrowers using these assets as collateral. The adjustments are intended to maintain the protocol's overall risk tolerance while optimizing capital efficiency, benefiting the Aave protocol's stability but potentially increasing risk for some borrowers.
Voting results
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Risk Parameter Updates for Aave V2 and Aave Arc (Fireblocks) 2022-05-26
AIP-78
Author(s): Paul Lei, Jonathan Reem, Nick Cannon, Watson Fu, Tony Salvatore, Sarah Chen
Simple Summary
A proposal to adjust nine (9) total risk parameters, including LTV, Liquidation Threshold, and Liquidation Bonus across three (3) Aave V2 assets.
In addition, this AIP proposes adjusting two (2) total risk parameters, including LTV and Liquidation Threshold, across one (1) Aave Arc (Fireblocks) asset.
Abstract
This proposal is a batch update of risk parameters to align with the [Moderate risk le…