{"id":75117,"date":"2024-04-03T05:27:57","date_gmt":"2024-04-03T09:27:57","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=75117"},"modified":"2024-04-03T05:32:01","modified_gmt":"2024-04-03T09:32:01","slug":"aave-to-counter-makerdaos-dai-expansion-risk","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/aave-to-counter-makerdaos-dai-expansion-risk\/","title":{"rendered":"Aave to Counter MakerDAO’s DAI Expansion risk"},"content":{"rendered":"\n

The proposal<\/a> seeks to reduce risks with minimal user impact, given the small DAI collateral on Aave, and users can switch to USDC or USDT.<\/p>\n\n\n\n

\"\"
Aave to Counter MakerDAO's DAI Expansion risk <\/figcaption><\/figure>\n\n\n\n

Lending procedure Aave has introduced a new proposal from the Aave Risk Framework Committee (ARFC)\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> to modify the Dai stablecoin's risk parameters.\u00a0<\/p>\n\n\n\n

The proposal was presented by the Aave Chan Initiative (ACI) team, which recommended that the loan-to-value ratio (LTV) of DAI be modified to 0% for all Aave deployments. <\/p>\n\n\n\n

A portion of the proposal published on April 2 proposes the elimination of sDAI incentives from the Merit program, commencing with Merit Round 2 and moving forward. <\/p>\n\n\n\n

This action aims to counter MakerDAO's recent assertive D3M strategy, which expeditiously augmented the DAI credit line from zero to approximately 600 million DAI in a single month, with the potential for it to soon attain one billion DAI. <\/p>\n\n\n\n

The proposal aims to mitigate potential risks with minimal user impact, considering that a small percentage of DAI deposits are utilized as collateral on Aave and users can transition to USD Coin USDC easily. <\/p>\n\n\n\n

\"\"
Mark Zeller, founder of the Aave Chan Initiative, proposes changes to th\u00a0 \u00a0Source:\u00a0Aave\u00a0<\/figcaption><\/figure>\n\n\n\n

An instance of risky minting practices on a lesser scale is illustrated in the proposal, as in the case of Angle's AgEUR (EURA), which was minted into EULER but was compromised within a week. <\/p>\n\n\n\n

When used as loan collateral on AAVE, Angle, an overcollateralized stablecoin protocol, and AgEUR, a decentralized euro stablecoin, illustrate the risks of DAI's stablecoin depegging. <\/p>\n\n\n\n

Protocol for decentralized financing MakerDAO has initiated preparations for launching its much-anticipated “Endgame” transformation, which, according to co-founder Rune Christensen, will “orient the platform toward scalable resilience and sustainable user growth.” <\/p>\n\n\n\n

Christensen declared the initiation of the “launch season” for the decentralized finance (DeFi) lending protocol in forum posts dated March 12, wherein he delineated a comprehensive five-phase strategy. <\/p>\n\n\n\n

In the first phase, projected to commence in mid-2024, an external marketing firm will be retained to rebrand the operation as a more user-friendly and pleasurable concept. <\/p>\n\n\n\n

Endgame's ultimate objective is to increase the market capitalization of the protocol's decentralized stablecoin, DAI, from its current $4.5 billion<\/strong> to “100 billion and beyond,” a level comparable to that of competitor Tether's USDT. <\/p>\n\n\n\n

Each Maker MKR will be renominated by MakerDAO.\u00a0Twenty-four thousand NewGovTokens. In addition, non-U.S. residents who possess NewStable tokens can annually mine 600 million NewGovTokens.\u00a0<\/p>\n\n\n\n

According to DefiLlama, <\/use><\/svg><\/span><\/a>Eigenlayer surpassed lending titan Aave on March 6 to become the second-largest decentralized finance (DeFi) protocol with a total value locked (TVL) of $11.5 billion. Eigenlayer is now second only to Ethereum liquid staking protocol Lido.\u00a0<\/p>\n\n\n\n

Lido has fewer than 430 daily active users, whereas Aave has more than 5,700, according to data from Token Terminal.<\/p>\n","protected":false},"excerpt":{"rendered":"

The proposal seeks to reduce risks with minimal user impact, given the small DAI collateral on Aave, and users can switch to USDC or USDT. Lending procedure Aave has introduced a new proposal from the Aave Risk Framework Committee (ARFC) to modify the Dai stablecoin’s risk parameters.\u00a0 The proposal was presented by the Aave Chan […]<\/p>\n","protected":false},"author":53,"featured_media":75126,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[73],"tags":[7115,19031,5643,1661],"class_list":["post-75117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-defi-news","tag-aave-2","tag-decentralization-2","tag-defi-2","tag-makerdao"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2024\/04\/Aavve.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/75117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/53"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=75117"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/75117\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/75126"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=75117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=75117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=75117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}