Lending protocol Aave introduced a new proposal through the Aave Risk Framework Committee (ARFC) to adjust the risk parameters associated with the Dai stablecoin.
The proposal, put forth by the Aave Chan Initiative (ACI) team, recommends modifying Dai’s loan-to-value ratio (LTV) to 0% across all Aave deployments.
As part of the proposal, it suggests the removal of sDAI incentives from the Merit program, effective from Merit Round 2 onwards.
The proposal aims to counteract MakerDAO’s recent aggressive D3M plan, which rapidly expanded the DAI credit line, potentially reaching 1 billion DAI soon.
By reducing potential risks, the proposal aims to have minimal impact on users, given the option to switch to alternative collateral options such as USD Coin or Tether.
The proposal highlights risky minting practices seen with Angle’s AgEUR, exemplifying the dangers of stablecoin depegging when used as collateral on Aave.
MakerDAO is preparing to launch its “Endgame” transformation, focusing on scalability and sustainable user growth, with a five-phase plan outlined by co-founder Rune Christensen.
Phase 1 involves engaging a marketing firm to rebrand the operation and aims to scale DAI to compete with rival stablecoin Tether.
MakerDAO plans to redenominate Maker tokens and distribute NewGovTokens, with non-U.S. NewStable tokenholders eligible for annual farming.
Eigenlayer surpassed Aave to become the second-largest DeFi protocol, with over $11.5 billion in total value locked (TVL), trailing only behind Ethereum liquid staking protocol Lido.
While Aave boasts over 5,700 daily active users, Lido has under 430, according to Token Terminal data.
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