# ARC - Add Uniswap V2 DPI-ETH LP to Aave AMM **URL:** \ **Category:** New Asset\ **Created:** [June 1, 2021, 7:43pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254 "2021-06-01T19:43:22Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![MatthewGraham](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/matthewgraham/32/1068_2.png) [@MatthewGraham](https://governance.aave.com/u/MatthewGraham)\ **Post date:** [June 1, 2021, 7:43pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/1 "2021-06-01T19:43:22Z")
# Summary We propose listing the [Uniswap V2 DPI-ETH LP token](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) as collateral on [Aave AMM](https://app.aave.com/markets). [Aave](https://app.aave.com/markets) would be the first lending protocol to integrate the [Uniswap V2 DPI-ETH LP token](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) into its platform. # Motivation Launched in October 2020 by [Index Coop](https://www.indexcoop.com/), [DPI](https://www.indexcoop.com/dpi) has grown to over $200M and is currently the most widely traded index product on ethereum. The main liquidity pool for [DPI-ETH](https://v2.info.uniswap.org/pair/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) is on [Uniswap V2](https://v2.info.uniswap.org/home) with ~$55M of capital deposited into the pool earning ~16.5% per annum in trading fee income. The [DPI-ETH](https://v2.info.uniswap.org/pair/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) pair is a low volatility pair making the LP token ideal collateral on [Aave AMM](https://app.aave.com/markets). DPI-ETH is the 16th largest pool listed Uniswap V2 and is capable of supporting a $184.5K trade for 1% slippage. This is significantly deeper liquidity relative to a number of leading DeFi protocol tokens already listed on [Aave AMM](https://app.aave.com/markets). At the time of writing [DPI](https://www.indexcoop.com/dpi) comprises [20.88%](https://www.indexcoop.com/dpi) AAVE tokens and the [DPI-ETH LP token](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) 10.44% AAVE. Adding [DPI-ETH LP tokens](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) as collateral would bring users into the Aave AMM ecosystem allowing capital, yield and value to accrue to Aave participants. # Specification Details on [DPI](https://www.indexcoop.com/dpi) the asset can be found on the [ARC: Add support for DeFi Pulse Index (DPI)](https://governance.aave.com/t/arc-add-support-for-defi-pulse-index-dpi/3576) forum post. DPI-ETH has a [Chainlink oracle](https://docs.chain.link/docs/ethereum-addresses/). DPI-ETH LP token price data can be obtained from [etherscan](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991). DPI-ETH Chainlink Oracle: [https://docs.chain.link/docs/ethereum-addresses/](https://docs.chain.link/docs/ethereum-addresses/) Currently, [Index Coop](https://www.indexcoop.com/) offers liquidity mining rewards for depositing the DPI-ETH LP token into a [staking contract](https://www.indexcoop.com/liquidity-mining) via the [Index Coop](https://www.indexcoop.com/) website. Liquidity mining rewards are currently 12.4% at the time of writing in addition to ~16.5% trading fee income. As DPI-ETH has no governance voting power and the emission schedule of the LP token is determined by users depositing into the Uniswap V2 liquidity pool. Currently, Aave AMM will be the first lending protocol to accept DPI-ETH LP token as collateral. There is no multisig controlling the trustless Uniswap V2 pool. ![](https://lh5.googleusercontent.com/wx9wa7Y_u1p83WAq_3xF6xVIXmNT-iXbnL9ZZ_f_46KAlixOc9Xm7S6VDt9GaJg0YL55LIf20f7mZZpjla58E_q9QIroq27vRJyC91w3J5SaeLLo_-l7Z2xmmPKUnrWBCLZ8xxcA) **![](https://lh4.googleusercontent.com/b0CDG7Bh_TvcPyATd1hJMf_8pKQ6QDTOpSPWVlAB5xMHI9J4OURbm_8vR4sJ9XVAapLNxJ_SuAB2cwhE2Lkhl6vp6W3O_LVKnlnaNC1CuJhfppUPX4ht8M4ZL3Xqqr31eoCCYRGf)** # Technical Specification DPI-ETH LP token - Aave Risk Assessment ![Screenshot 2021-06-01 at 20.40.51](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/1X/03023cbf171559ea29c44be0960bc97a81bc54b7.png) The Uniswap V2 DPI-ETH pool has a 7-day average trading volume of $10.9M, ~$55M of liquidity and the pool was seeded 6th October 2020, 262 days prior to 1st June 2021. There are over 900 unique holders of 23,324 DPI-ETH LP units, of which ~700 unique holders have deposited ~94.4% of the circulating supply into Index Coop’s [staking contract.](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991?a=0xb93b505ed567982e2b6756177ddd23ab5745f309) Etherscan shows 36,637 transfers of the DPI-ETH LP token. DPI the asset has an overall risk score of B and Uniswap V2 DPI-ETH LP has marginally better risk score of B+. Referring to [AMM-Market](https://docs.aave.com/risk/asset-risk/amm-market) documentation, this assessment is aligned with AAVE, UNI, MKR, SNX and YFI which all experienced improving risk scores on AMM relative to Aave V2. Using equations cited below, the following volatility statistics have been calculated for the LP tokens USD value. DPI-ETH LP 7 days volatility = 0.0712 DPI-ETH LP 30 days volatility = 0.0558 DPI-ETH LP 90 days volatility = 0.0644 DPI-ETH LP 180 days volatility = 0.0632 Risk Parameters ![Screenshot 2021-06-01 at 20.41.46](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/1X/910d6ddbde6f20f273386766acf794bb8747c950.png) The risk parameters mentioned above are in line with [other LP](https://docs.aave.com/risk/asset-risk/amm-market) tokens like Uniswap and Maker. Aave documentation states the Liquidation Bonus is set at 15% for all LP tokens. The LTV & Liquidation Threshold parameters are derived from [DPI](https://www.indexcoop.com/dpi)’s [risk assessment](https://governance.aave.com/t/arc-add-support-for-defi-pulse-index-dpi/3576/9). Further reference material on [DPI](https://www.indexcoop.com/dpi) can be found on [ARC: Add support for DeFi Pulse Index (DPI)](https://governance.aave.com/t/arc-add-support-for-defi-pulse-index-dpi/3576) # Author @MatthewGraham - I go by ![:fire:](https://lh4.googleusercontent.com/FU-0MzC3ZxnY3Baqve-QCwuOK8j57d_SDbLEAgC4Sl1FTtpC1oFfel-ftxOnuTAq19XzHPJMEcuT5pYvjj8x6M4f1J8Fw5B-GDLdDkQAJb2uIC6L-8HWrdR6Z0NWMpf1hIolu1wI ":fire:")Fire ![:fire:](https://lh4.googleusercontent.com/gbVD5SDP2BESHywqr-OYY7EhrHEidQLwOGXY4HYBZCGgFLhgVsW7EsMARq1wTq1x_-UDtBNow6Uxxuq5Wjdy09zPlwYiUOJWJSmkeVieUsfORXTfHw1iJtorzNjsyx4GwkOAX5Ay ":fire:") on discord and I am a contributor at Index Coop. # Proposal Power I am glad to announce Index Coop has created a proposal power delegation address to get DPI listed on Aave V2. For AAVE holders that would like to show support for listing [Uniswap V2 DPI-ETH LP](https://etherscan.io/token/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) on [Aave AMM](https://app.aave.com/markets), please delegate your proposal powers to the following address. [0x1870D5Be439E3cB1aeCFf581d6572066e5098eAA](https://sybil.org/#/delegates/aave) Thank you in advance for your support :) ---
**Author:** ![allan.g](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/allan.g/32/1746_2.png) [@allan.g](https://governance.aave.com/u/allan.g)\ **Post date:** [June 2, 2021, 1:35am UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/2 "2021-06-02T01:35:32Z")
100% in support of this proposal - would love to see DPI on Aave as soon as possible. ---
**Author:** ![afromac](https://avatars.discourse-cdn.com/v4/letter/a/b3f665/32.png) [@afromac](https://governance.aave.com/u/afromac)\ **Post date:** [June 2, 2021, 12:35pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/4 "2021-06-02T12:35:52Z")
This just makes sense. ---
**Author:** ![cedrick](https://avatars.discourse-cdn.com/v4/letter/c/b3f665/32.png) [@cedrick](https://governance.aave.com/u/cedrick)\ **Post date:** [June 2, 2021, 5:07pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/5 "2021-06-02T17:07:50Z")
Really excited about this! Would love to see this happen. ---
**Author:** ![mrvls\_brkfst](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/mrvls_brkfst/32/963_2.png) [@mrvls\_brkfst](https://governance.aave.com/u/mrvls_brkfst)\ **Post date:** [June 5, 2021, 8:34am UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/6 "2021-06-05T08:34:23Z")
LP tokens as collateral are one of the great DeFi possibilities as I see it. In this case, using a solid and low volatility pair is very compelling - great write up. Would be happy to see this go forward. ---
**Author:** ![haave](https://avatars.discourse-cdn.com/v4/letter/h/e95f7d/32.png) [@haave](https://governance.aave.com/u/haave)\ **Post date:** [June 5, 2021, 6:54pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/7 "2021-06-05T18:54:04Z")
> [@MatthewGraham](#): > > The [DPI-ETH](https://v2.info.uniswap.org/pair/0x4d5ef58aac27d99935e5b6b4a6778ff292059991) pair is a low volatility pair > [@MatthewGraham](#): > > Using equations cited below, the following volatility statistics have been calculated I can’t seem to find those equations, could you help me please? I would expect underlying DeFI tokens of DPI to be strongly correlated with ETH, so DPI-ETH pair to have roughly same volatility as ETH. Is that really “low volatility”? ---
**Author:** ![MatthewGraham](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/matthewgraham/32/1068_2.png) [@MatthewGraham](https://governance.aave.com/u/MatthewGraham)\ **Post date:** [June 5, 2021, 7:20pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/8 "2021-06-05T19:20:37Z")
Hi @haave, Happy to help 🙂 I performed the following steps in calculating the values presented in the post: 1. Determine DPI-ETH LP tokens value in USD 2. Apply ln(close(t+1)/close(t)) where t is days 3. Calculate the standard deviation by using the stdev formula in excel over the specified time period The ETH volatility data can be found here: [Methodology - Risk](https://docs.aave.com/risk/asset-risk/methodology) We published this article in February on our substack which you may find interesting. The article compares, DPI, ETH and BTC on a few statistical measures. > **[Should You Add $DPI to Your BTC & ETH Portfolio?](https://indexcoop.substack.com/p/should-you-add-dpi-to-your-btc-and)** > > Analysing crypto index products relative to BTC and ETH ---
**Author:** ![mrvls\_brkfst](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/mrvls_brkfst/32/963_2.png) [@mrvls\_brkfst](https://governance.aave.com/u/mrvls_brkfst)\ **Post date:** [June 21, 2021, 8:16pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/9 "2021-06-21T20:16:52Z")
So, the main ask here is for AAVE holders to delegate for this to the proposal power address? And then it can be listed? ---
**Author:** ![eboado](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/eboado/32/2268_2.png) [@eboado](https://governance.aave.com/u/eboado)\ **Post date:** [August 16, 2021, 1:14pm UTC](https://governance.aave.com/t/arc-add-uniswap-v2-dpi-eth-lp-to-aave-amm/4254/10 "2021-08-16T13:14:31Z")
@MatthewGraham how does it work exactly the oracle side on this potential listing? I assume that will use same oracle smart contract as other LP tokens used on the AMM pool, but would like to confirm, as it is a fundamental aspect. Specially taking into account that it is an LP token on which 1 side is also composed by multiple tokens. Another question is, how does it affect that the majority of the supply is deposited on a stake contract? It seems that those stakers will not be able to use the DPI-ETH.