Aave is lowering DAI loan-to-value (LTV) ratio by 12 share factors after MakerDAO added Ethena’s USDe artificial greenback as collateral.
Aave, the biggest lending protocol in decentralized finance (DeFi), is decreasing the quantity of MakerDAO’s DAI stablecoin allowed as collateral on considerations Maker has turn out to be extra dangerous after it added Ethena’s USDe as backing for DAI.
Aave is lowering the loan-to-value (LTV) ratio of DAI and sDAI by 12 share factors, bringing it all the way down to 63%, based on a submit on the protocol’s governance discussion board.
The choice comes after Marc Zeller, founding father of the Aave Chan Initiative, proposed to utterly take away DAI as collateral on Aave after MakerDAO accredited an government proposal, which let traders borrow $100 million of DAI in opposition to USDe and sUSDe (staked USDe), through one other lending protocol, Morpho.
“LTV goes down a bit however a lot increased than zero, DAI stays in Aave, we transfer on. Onwards,” Zeller stated on X.
The choice comes following an in depth evaluation performed by Chaos Labs, which stated that Ethena’s mannequin “introduces unprecedented quantitative issues within the DeFi house.”
That, coupled with “the minimal income DAI collateral brings to Aave,” signifies that “Aave may determine to scale back publicity to DAI as collateral,” Chaos Labs stated.
Aave governance determined to observe Chaos Labs’s “Conservative” suggestion fairly than its “Aggressive” one, which might have diminished DAI’s LTV to 0%.
