According to PANews, Aave DAO has approved a proposal to set the loan-to-value (LTV) ratio for USDS and DAI to 0% across all Aave V3 instances and increase the risk reserve rate (RF) to 25%. The proposal highlights that USDS is no longer suitable as collateral due to decreased profitability and asymmetric risks in its issuance model. MakerDAO founder Rune responded, indicating a misunderstanding of the Sky ecosystem's lending logic and expressing optimism that USDS could regain collateral eligibility with improved transparency and scalability.

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