Areta Delegate Platform

Delegate Platforms
1

Key Info

Please delegate to us on: 0x8b37a5Af68D315cf5A64097D96621F64b5502a22

Introduction

Areta is an ex-McKinsey/Blackstone crypto-native investment bank specialising in strategic transactions, complex governance processes, and institutional delegation for protocols and institutions.

We have had the privilege to work for some of the leading companies and DAOs in the crypto space. Examples of our work include leading the first cross-ecosystem growth initiative for Uniswap and Arbitrum, the first acquisition of Coingecko, the sale of Solscan to Etherscan, and the strategic wind-down of Gro DAO.

As DAOs emerge from their infancy, their structures have proven powerful tools for enabling decentralisation and autonomy. However, they often encounter challenges in maintaining the organisation, highlighted by governance issues such as contributor onboarding and delegate overload. This scenario has highlighted areas where DAOs can improve in establishing structured processes for better collaboration and are open to further strengthening against inefficiencies.

Recognising the need for evolution, we focus on excellent DAO participation with robust, defensible analysis of proposals through a structured voting process while simultaneously applying our deep institutional knowledge and strategic governance expertise to offer proactive DAO governance solutions aimed at nurturing the ecosystem for the long term.

Delegate Statement (why you should delegate to us)

First and foremost, Areta’s key tenets as delegates are as follows:

  • We will aim for 100% voting participation - we are deeply invested in the ecosystem and our goal is to meaningfully support its direction via thoughtful, educated governance decisions.
  • We always commit to voting independently and impartially.
  • We will open source our rationale through frequent updates to this thread, which will act to anchor our thinking and make ourselves accountable to the wider Aave community.

We will achieve these tenets through our four unique sources of value:

Structured & Streamlined Voting Process

  • Our team lead adds new proposals to a shared tracker and assigns each incoming proposal to a specific member of the team.
  • For each proposal, we prepare a standard memo summarising the key issues, the black and white hat case (pros and cons), and a recommended decision with accompanying rationale.
  • Each proposal is then peer reviewed by another team member.
  • For complex proposals that require more discussion, we involve more members of the team as necessary to form a joint opinion.
  • We then publish our voting rationale externally on our public forum.

We always try to base our votes on sound, defensible rationale so that we are internally consistent and our voting track record stands up to external critique.

Ecosystem Growth and Expansion to Institutions

Leveraging the Areta network to promote and foster flourishing ecosystems across DAOs. Bringing unprecedented ties to a deep traditional network of corporates, strategics, and investors.

Governance Optimisation

Utilising our expertise to diagnose, analyse, correct, and enhance the effectiveness of DAO governance, ensuring streamlined operations and decision-making, while building up accountability structures.

Existing Integration with the Aave Ecosystem

Areta’s lead delegate, Sid Shah, has been an active participant in Aave governance over the last 1.5 years, leading LBS Blockchain Society’s delegation on Aave and also serving as Co-President of the Society. During Sid’s time in leading LBS’ delegation on Aave, he:

  • Established the LBS Blockchain Society delegate platform as the most viewed platform on Aave.
  • Maintained a very high voting participation rate, leading to their inclusion as the inaugural recipients of the Orbit program in 2023;
  • Added value to the DAO by co-authoring two governance proposals (for the gas rebate and private Snapshot trial); and
  • Formed close relationships with stakeholders across the DAO.

As LBS Blockchain Society’s delegation terminated in February 2024 due to their delegators, Avara, deciding to stop delegating across the board to promote further decentralisation of the Aave DAO, Sid will now take on the mantle of Aave governance participation under the Areta umbrella in a decision that was welcomed by the community.

Conclusion

As delegates, we commit to dedicating our time and resources to help accelerate Aave’s development and growth. We will leverage our global network, business knowledge, and entrepreneurial mindset, to drive value for Aave token holders, and in doing so, seek to have a profound impact on the way the world does business within Web3.

Conflicts of Interest

Areta currently does not have any material conflicts of interest. We do not hold any other cryptocurrencies. We agree to keep the Aave community updated should any conflicts of interest arise.

Waiver of Liability

By delegating to Areta, you acknowledge and agree that Areta will participate on a best efforts basis and will not be liable for any form of damages related to participation in the Aave Protocol or this DAO.

8 Likes
2

Aave V1 Deprecation Phase 2

Vote Result: YES

Rationale

Deprecating Aave v1 is critical and taking this intermediary step will allow further progress with the deprecation. The analysis completed by BGD to raise the liquidation bonus to 3% is logical. Moreover, we voted for Part 1 of the AIP under the LBS Blockchain Society umbrella according to the rationale here, showing that we are in favour of this strategy. Therefore, we will vote YES in favour of this proposal.

Note: We did not have our voting power delegated at the time of creation of this proposal, but have posted our rationale for this vote to pass regardless.

1 Like
3

[TEMP CHECK] Add rsETH to Aave V3 Ethereum

Vote Result: YES

Rationale

KelpDAO has seen a lot of activity recently and adding rsETH will attract significant capital to Aave, with potential for expansion by implementing strategies around rsETH and leveraged restaking looping. The AVS’ have not launched yet but it is important to make sure that when they do, the restaked ETH that is part of rsETH is securing high-quality projects and there is no co-mingling of risks between secured AVS’. It will be important for Chaos Labs to accurately judge these risks in terms of the parameters for rsETH now (which can be more accommodating) and in the future, when AVS’ are potentially activated. Therefore, we will vote YES in favour of this proposal and look forward to the increased activity on Aave.

4

Set Liquidity Observation Labs as Emission Manager for wstETH on V3 Markets

Vote Result: YES

Rationale

This proposal makes sense and it is beneficial for Aave if an entity like Lido wants to fund incentive programs to increase usage of wstETH. Setting the Lido Liquidity Observation Labs wallet as the Emission Manager is non-obtrusive and does not pose risk to the protocol. Therefore, we will vote YES in favour of this proposal.

5

GHO Borrow Rate Increase 2024-02-29

Vote Result: YES

Rationale

Increasing the GHO borrow rate in this context makes sense - AIP-381 allows for 100bps increases every 7 days up to 9.5% if the monthly average price of GHO is outside the 0.995 to 1.005 price range, which it is currently. This AIP will align the GHO borrow rate with market rates which will maintain its attractiveness while helping the peg. Therefore, we will vote YES in favour of this proposal.

6

Reserve Factor Updates (February 29, 2024)

Vote Result: YES

Rationale

Increasing the RFs to incentivise migration from v2 to v3 makes sense and will not put user funds at risk of liquidation. Incrementally increasing the RF of unfrozen assets on v2 also allows for a gradual move and does not immediately destabilise the v2 market on Polygon. This is the latest in this series of RF updates on Polygon v2 and it is logical to continue to incentivise migration to v3. Therefore, we will vote YES in favour of this proposal.

7

[TEMP CHECK] GHO Cross-Chain Strategy Launch with CCIP

Vote Result: YES

Rationale

Deploying GHO cross-chain is critical to its growth, utility, and stability across DeFi. The question up for debate here is not whether Aave should deploy GHO cross-chain; the community is overwhelmingly in favour of doing so. The main question is how to do so - whether to use CCIP or native bridges of the destination chains. We think that the initial design proposed by Aave Labs, after thoroughly reviewing the forum post and ensuing discussions, makes the most sense. We acknowledge the safety benefits that stem from using native bridges, but the benefits of CCIP, especially as a starting point, outweigh these considerations, namely because of the following reasons:

  • Speed and user experience are very important considerations and using native bridges sometimes compromise on these, especially in the destination chain → source chain direction. In the current market conditions, which will likely engender increased usage of GHO quickly across chains, it is important to use the most user-friendly solution.
  • Using Chainlink’s DON network does not add any additional trust assumptions upon Aave - notably, if Chainlink infrastructure fails at some point, a large chunk of DeFi will be affected. Obviously, this reflects a need for DeFi to diversify and therefore diversifying across other oracle networks and messaging infrastructures is important for the space. However, using CCIP does not limit the DAO from using a.DI or native bridges at any point - these integrations can be built in the near future and provide better trust assumptions for cross-chain GHO while initially providing a good starting point for GHO expansion now.
  • The technical complexity of deploying CCIP is lower and can be implemented more quickly with the support of the Chainlink team - this means that the DAO can also choose to implement native bridges in the near future if it chooses to do so.
  • The other benefits of CCIP - risk mitigation tools, flexible billing, programmable token transfers - are also added positives.

Therefore, we will vote YES in favour of this TEMP CHECK and welcome the opportunity to expand GHO cross-chain. We will also be in support of introducing native bridge implementations in the near future, and look forward to discussing the optimal chains to deploy on first.

1 Like
8

[ARFC] Onboard weETH to Aave v3 on Ethereum

Vote Result: YES

Rationale

Restaking has quickly become one of the hottest sectors in DeFi and ether.fi is at the forefront of it. ether.fi is a long-standing player in DeFi and has shown how it values decentralisation and solo staking through its innovative work with Obol Labs and the usage of DVTs. Restaking is relatively risky but usage of ether.fi is high and current eETH holders will bring increased usage and fees to Aave. Chaos Labs is in favour and their initial recommendations are conservative, which make sense for an asset that only introduced withdrawals in Dec ‘23. Its inclusion in the ETH-correlated e-mode category also makes sense. Therefore, we will vote YES in favour of this proposal.

9

[ARFC] Add gmBTC on Arbitrum V3

Vote Result: YES

Rationale

GMX is an extremely reputable protocol which has seen a significant amount of activity over the last 2 years. gmBTC gains yield from leveraged trading and swap fees, and with a 21.23% APR with $136 million of the token already being minted, is a very attractive asset for users to hold and use as collateral. Lastly, GMX has been audited multiple times, has high bug bounties, and Chainlink oracles will provide pricing for this asset, which reduces the level of risk from listing gmBTC. Chaos Labs is in favour of this proposal and their specific analysis of the GMX market to identify the appropriate risk parameters makes sense, especially the non-atomic aspect of the liquidations requiring a higher liquidation bonus. Assuming the worst case scenario concerning the gmToken’s ability to be liquidated and withdrawn based on the parameter values set is best practice. Therefore, we will vote YES in favour of this proposal.

1 Like
10

[ARFC] Ethereum v2 Reserve Factor Adjustment

Vote Result: YES

Rationale

Migrating users to Aave v3 is critical and it has been 1+ years since v3 has been implemented. This proposal gives sufficient notice to v2 depositors to migrate to v3 at this point. The same strategy has been employed on Polygon v2 and does not affect users’ HF. Therefore, we will vote YES in favour of this proposal.

11

Assign Emission Admin - Ethereum, Arbitrum and Optimism

Vote Result: YES

Rationale

Setting this SAFE as the Emission Manager for USDC rewards across Aave v3 Optimism makes sense. Therefore, we will vote YES in favour of this proposal.

12

[ARFC] Stablecoin Harmonization and Asset Parameters Optimization

Vote Result: YES

Rationale

This analysis done by ACI is top-quality - it behooves Aave DAO to de-risk the protocol if the data supports it, and in this case, there is no point of using alternative stables and long-tail assets as collateral if it does not add outsize revenue to the protocol. If market demand for alternate stablecoins is not sensitive to high borrow rates, this poses a higher risk for the protocol and requires mitigation. The ACI’s strategy is logical; a staged LT reduction has been implemented before in the DAO and has been shown to work. Increasing the RF will drive revenue to Aave (even if the amount is insubstantial) while incentivising holders to move away from these stablecoins as collateral. Therefore, we will vote YES in favour of this proposal.

13

[ARFC] Aave Liquidity Committee Funding

Vote Result: YES

Rationale

It is key to fund initiatives to improve GHO liquidity and ensure a 1:1 peg. There are clear KPIs outlined for this funding round, which will make tracking of the ALC’s performance simpler. The Maverick and Uniswap v3 strategies outlined make sense and have already seemingly contributed to getting GHO’s peg back in control, as have the increases to the borrow rate and the implementation of stkGHO.

Getting GHO to a 1:1 peg and expanding the set of use cases for GHO, alongside the initiative to make GHO cross-chain, are crucial in cementing the asset as a staple in DeFi. Therefore, we will vote YES in favour of this proposal.

14

[ARFC] Set Liquidity Observation Labs as Emission Manager for wstETH on Scroll

Vote Result: YES

Rationale

This proposal makes sense and it is beneficial for Aave if an entity like Lido wants to fund incentive programs to increase usage of wstETH. Setting the Lido Liquidity Observation Labs wallet as the Emission Manager is non-obtrusive and does not pose risk to the protocol. Moreover, it is similar to the proposal to set Liquidity Observation Labs as Emission Manager for wstETH on other Aave v3 markets, and setting them as Emission Managers for the Scroll market is logical. Therefore, we will vote YES in favour of this proposal.

15

Merit Approvals

Vote Result: YES

Rationale

This is the on-chain proposal for this Snapshot ARFC that we voted in favour of according to our rationale under the LBS Blockchain umbrella here. We understand @sakulstra’s frustration - however, we think it is much more important right now to have a tighter GHO peg for a longer period of time. We think ACI’s suggestion that the GHO budget should be earmarked for when it rewards a higher proportion of GHO borrowers makes a lot of sense. It may be better to hold off on executing the Merit program for GHO specifically once the ALC and Funding Update proposals are executed and have had time to have an impact on the market. We will vote YES in favour of this AIP and hope that the first iteration of the Merit program is successful.

1 Like
16

Funding Update

Vote Result: YES

Rationale

This is the on-chain proposal for this Snapshot ARFC that we voted in favour of according to our rationale under the LBS Blockchain umbrella here. Therefore, we will vote YES in favour of this AIP.

1 Like
17

[ARFC-Addendum] Introduce “Hold StkGHO” Reward Action

Vote Result: YES

Rationale

As we commented on the forum post, we think it is much more important right now to have a tighter GHO peg for a longer period of time to drive confidence in the asset. ACI’s suggestion that the GHO budget should be earmarked for when it rewards a higher proportion of GHO borrowers makes a lot of sense and therefore GHO distribution should be delayed in the Merit program. As confirmed on the forum post, rewarding stkGHO is also a positive action for the DAO by contributing to the SM, and we can initially prioritise this positive action over the borrow GHO action until the borrow cap is >= 50M, which is when we can start distributing GHO for borrowers. Another benefit is the smooth transition to stkGHO being rewarded in GHO long term.

Therefore, we will vote YES in favour of this proposal.

1 Like
18

Amend Safety Module Emissions

Vote Result: YES

Rationale

Supporting the GHO peg is crucial and GHO’s supply needs to expand; it cannot do so without the peg being strengthened, and diverting the AAVE rewards from stkAAVE and stkBPT towards stkGHO is logical. Reducing the GHO borrow rate would not make sense since users would borrow GHO and sell for USDC. GHO’s use cases can only be improved if the supply expands, which can only be done once the peg is much stronger. Therefore, it is logical to try and strengthen the peg as much as possible, and we will vote YES in favour of this proposal.

19

[ARFC] Add gmETH on Arbitrum V3

Vote Result: YES

Rationale

Similar to the gmBTC ARFC that we voted in favour of according to our rationale here, this proposal to onboard gmETH makes sense to us. gmETH gains yield from leveraged trading and swap fees, and is a very attractive asset for users to hold and use as collateral. Chaos Labs is in favour of the proposed parameters. Therefore, we will vote YES in favour of this proposal.

20

[TEMP CHECK] Onboard wbETH on Aave V3 BNB Chain

Vote Result: YES

Rationale

As one of the largest LSTs on BNB Chain, it would make sense to include wbETH on the BNB Chain deployment. We welcome Chaos Labs’ opinion on the appropriate parameters with which to list wbETH. Therefore, we will vote YES in favour of this TEMP CHECK.