An Aave Request for Comment proposes raising LTV for WETH to 81% and liquidation threshold to 84% across Ethereum Core, Base, and Arbitrum, with similar upward revisions for wstETH, BTC, and related collateral families. The calibration is based on 99.9th-percentile hourly price excursions observed during the February and October 2025 stress events, and accounts for Chainlink feed density during fast markets and the time required to clear positions through sequential liquidation calls.
For Armada's crypto repo desk, these proposed Aave parameters represent the most data-driven public benchmark for BTC and ETH collateral efficiency currently available in institutional DeFi. If Aave's governance approves higher LTVs, counterparties may expect comparable or more competitive terms from bilateral repo providers. Armada should stress-test its current LTV schedule against the same 2025 drawdown windows used in the ARFC calibration and confirm that its liquidation procedures can clear positions within a one-hour window at current market depth.