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Aave Proposal Approved: USDS LTV Reduced to 0, Collateral Qualification Removed, Reserve Factor Increased to 25%
Summary: In a recent development, the Aave community has approved a proposal to remove USDS collateral qualification (adjusting LTV to 0), exclude it from e-Mode, and increase the reserve factor (RF) from 10% to 25%, awaiting final execution through AIP. The main reasons cited are declining USDS revenue contribution, low collateral utilization, and potential risk exposure ...
In a recent development, the Aave community has approved a proposal to remove USDS collateral qualification (adjusting LTV to 0), exclude it from e-Mode, and increase the reserve factor (RF) from 10% to 25%, awaiting final execution through AIP. The main reasons cited are declining USDS revenue contribution, low collateral utilization, and potential risk exposure from the issuance mechanism. MakerDAO founder Rune responded, clarifying misconceptions about borrowing methods like Spark, Grove, and Stars from Sky, stating that reasonable rates have been paid and settlements are regular. He emphasized that if Sky enhances transparency and scalability significantly through Data Hub, Grove, and Sentinel Network in the future, USDS still has a chance to return to Aave's list of collateral assets, promoting wider adoption.
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Link: Aave Proposal Approved: USDS LTV Reduced to 0, Collateral Qualification Removed, Reserve Factor Increased to 25% [Copy]
