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title: "Liquidations Grace Sentinel activation" author: "BGD Labs @bgdlabs" discussions: "https://governance.aave.com/t/aave-v2-v3-security-incident-04-11-2023/15335/26"

Simple Summary

This proposal actives a new Aave v2 feature, the Liquidations Grace Sentinel, an emergency mechanism allowing controlled unpause by the Aave Guardian whenever a pause was enabled.

Additionally, extra stable debt token upgrades are included, following the same approach as proposal 359

Motivation

The Liquidation Grace Sentinel is a new feature introduced into Aave v2, allowing for the Aave Guardian to granularly (per asset) set a "grace period" for an asset. An asset being in "grace period" implies that liquidations involving it as collateral OR repaid debt can't be processed, so factually is a less aggressive pool-wide pause.

The main objective of this mechanism, is to allow a gracefully unpause of an Aave v2 pool: if market conditions allow, a grace period of X minutes/hours/days can be set for when a pool will be unpaused.

Same as with the pause mechanism (as they are complementary), the usage of the liquidation grace sentinel will be allowed only for the current `emergencyAdmin`` of the Aave v2 pool: the Aave Guardian.

Specification

On AaveV2Etherem, AaveV2Polygon and AaveV2Avalanche the proposal will call:

• POOL_ADDRESSES_PROVIDER.setLendingPoolCollateralManager(NEW_COLLATERAL_MANAGER); to update the COLLATERAL_MANAGER with a new version containing the LiquidationsGraceSentinel

In addition stable debt tokens are upgraded analog to aip 359.

The proposal has been tested by BGD Labs and reviewed by Aave Companies and Certora.

References

• Implementation: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche
• Tests
• Discussion

Copyright

Copyright and related rights waived via CC0.