[Aave Community Passes Proposal to 'Remove USDS and DAI Collateral Eligibility and Increase Risk Reserve Rate'] The Aave DAO has passed a proposal to set the loan-to-value ratio (LTV) of USDS and DAI to 0% and increase the risk reserve rate (RF) to 25% across all Aave V3 instances. The proposal states that USDS's declining profitability and asymmetric risks in its issuance model make it no longer suitable as a collateral asset. MakerDAO founder Rune responded, saying there is a misunderstanding of the lending logic within the Sky ecosystem. He added that as transparency and scalability improve in the future, USDS may regain its collateral eligibility.