The Aave community passed a proposal to remove USDS and DAI from collateral eligibility and to increase the risk reserve ratio.

According to Odaily Planet Daily, Aave DAO has passed a resolution to lower the loan-to-value (LTV) ratio of USDS to DAI to 0% and raise the risk reserve ratio (RF) to 25% in all Aave V3 deployments.

The proposal argues that USDS's current yield structure is narrowing and its issuance mechanism carries certain asymmetric risks, making it unsuitable as collateral. In response, MakerDAO founder Rune stated that there are still misunderstandings about the lending logic of the Sky ecosystem, and that USDS still has the opportunity to be reinstated as collateral assets in the future with increased transparency and scalability.