Aave community passes the proposal to 'remove USDS and DAI collateral eligibility and increase risk reserve rate' The Aave DAO has approved a proposal to set the loan-to-value (LTV) ratio of USDS and DAI to 0% and increase the risk reserve rate (RF) to 25% across all Aave V3 instances. The proposal highlights that USDS's profitability has declined and its issuance model carries asymmetric risks, making it unsuitable as collateral. MakerDAO founder Rune responded, stating that there is a misunderstanding of the Sky ecosystem's lending logic. He believes that as transparency and scalability improve in the future, USDS may regain its collateral eligibility.