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Aave Adjusts DAI Risk Parameters in Response to MakerDAO's Expansion

Aave Adjusts DAI Risk Parameters in Response to MakerDAO's Expansion
Aave Adjusts DAI Risk Parameters in Response to MakerDAO's Expansion

Aave Proposes Risk Parameter Adjustments for DAI Amidst MakerDAO's Expansion

Decentralized lending platform Aave has put forth a proposal to adjust risk parameters for the DAI stablecoin. This move is in response to concerns raised by Aave's Risk Framework Committee regarding MakerDAO's ambitious expansion plans.

The proposal aims to mitigate potential risks while minimizing user impact. Key measures include setting DAI's loan-to-value ratio (LTV) to 0% on all Aave deployments and removing sDAI incentives from the Merit program.

Rationale Behind the Proposed Changes

The adjustments stem from concerns over MakerDAO's Direct Deposit Module (D3M) plan, which has rapidly expanded DAI's c

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