A new proposal from the Aave community aims to mitigate the potential risks of MakerDAO's "liquidity mining" by adjusting the DAI risk parameters

PANews reported on April 2nd that the Aave Chan Initiative (ACI) team has launched a new ARFC proposal in the Aave community, aiming to adjust the risk parameters of the DAI stablecoin. The proposal suggests adjusting the Loan-to-Value (LTV) ratio of DAI to 0% on all Aave deployments and removing sDAI incentives from the Merit program, effective from Merit Round 2 and onwards.

This move is in response to MakerDAO's recent D3M plan incentives, which have led to an increase in DAI credit lines from zero to a predicted 600 million DAI within less than a month, potentially reaching 1 billion DAI in the short term. This has increased the risk of using DAI as collateral. Considering that only a small portion of DAI deposits are currently used as collateral on Aave, and users can easily switch to USDC or USDT as alternative collateral options, the purpose of this proposal is to mitigate potential risks without significantly impacting user base.