AaveDAO is currently discussing the limits on Dai collateral, and risk management consultants Chaos Labs have proposed reducing the loan-to-value ratios by 12%. Previously, Aave Chan founder Marc Zeller suggested a 75% reduction. Aave is a crypto lending platform where borrowers can take out loans using one cryptocurrency as collateral.

AaveDAO, governed by Aave token holders, oversees its operations. Dai is an algorithmic stablecoin backed by various forms of crypto collateral, including USDC and Ethereum. MakerDAO, which governs the Maker protocol, faced criticism after minting 600 million DAI and depositing it in a vault with the Morpho lending protocol. MakerDAO claims that the newly minted Dai will be properly backed by stable collateral as it will be lent out to end-users who deposit eUSD to the Morpho protocol. It's an ongoing discussion with various perspectives.

Critics argue that using eUSD as collateral is risky, and MakerDAO is being too aggressive. A proposal was made by Zeller to set the Aave LTV for Dai to zero, effectively banning it as collateral. Chaos Labs, AaveDAO's risk management consultant, suggests a 12% reduction in LTV instead. This would still allow Dai as collateral but with a higher collateral-to-loan ratio. The debate centers around the nature of eUSD, which is backed by stETH and futures short positions.

It's an ongoing discussion with different perspectives. Let me know if you have any more questions or if there's something else you'd like to talk about!