[ARFC] Aave Liquidity Committee Funding Phase IV
Vote Result: YES
Rationale
Supporting the proliferation of GHO across the Ethereum ecosystem is one of the most important focuses for the Aave DAO. The ALC has listed out in clear detail their plans for Phase IV and we expect these to help GHO reach the 50M TVL target soon. Allocating a budget of 950k GHO to help GHO grow across Ethereum and Arbitrum is a no-brainer, especially with the clear next steps outlined. Therefore, we will vote YES in favour of this proposal.
[ARFC] Onboard wstETH to Aave V3 on BNB Chain
Vote Result: YES
Rationale
wstETH on BNB Chain via the Axelar/Wormhole bridge has been ratified as canonical, and on-chain supply and DEX liquidity has increased significantly. wstETH is one of the most used tokens across DeFi and adding this to v3 BNB Chain will help Aave earn further revenue and market share on BNB Chain. The risk providers are also in favour; therefore, we will vote YES in favour of the proposal.
[ARFC] Onboard USDC to Aave v3 Lido Instance
Vote Result: YES
Rationale
Onboarding USDC to Aave v3 Lido makes sense since the asset can be borrowed with wstETH being used as collateral and there will be a large inflow of wstETH and USDC on the Lido instance. Given that USDC can be used to loop with itself if incentives are enabled and hence increase costs for organic borrows, we are in favour of disabling its use as collateral. Therefore, we will vote YES in favour of this proposal.
Onboard USDC to Aave V3 Lido Instance
Vote Result: YES
Rationale
This is the on-chain proposal for this Snapshot ARFC that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
Set ACI as Emission Manager for USDS, aUSDS and awstETH
Vote Result: YES
Rationale
This proposal is in line with a series of proposals we have voted in favour of with our rationale here to make the ACI the Emissions Manager for incentives programs. Therefore, we will vote YES in favour of this proposal.
[TEMP CHECK] Deploy aUSDC GSM on Ethereum
Vote Result: YES
Rationale
Given the opportunity cost of holding assets in the GSM, generating additional yield for the treasury via this aUSDC GSM is a no-brainer in conjunction with the BUIDL and USTB GSMs. Therefore, we will vote YES in favour of this proposal.
Upgrade all Aave instances to 3.2
Vote Result: YES
Rationale
This is the on-chain proposal for this Snapshot ARFC that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
[ARFC] Onboard sUSDe, USDe and weETH to Aave v3 on zkSync
Vote Result: YES
Rationale
Adding liquidity for all of these assets on ZKsync and jumpstarting their markets in partnership with Ethena makes sense to execute on ZKsync. Both risk providers also support the proposal. Therefore, we will vote YES in favour of this proposal.
Aave Liquidity Committee Funding Phase IV
Vote Result: YES
Rationale
This is the on-chain proposal for this Snapshot ARFC that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
May Funding Update Part B
Vote Result: YES
Rationale
This is an operational Aave Finance proposal and we will vote YES in favour of it.
[ARFC] Onboard FRAX to Aave v3 Lido Instance
Vote Result: NO
Rationale
At this point, given the feedback from TokenLogic and the relatively small expected demand for wstETH <> FRAX borrowing as attested to by the small supply cap, it does not seem to make a lot of sense to onboard FRAX onto the Lido instance. Therefore, we will vote NO against this proposal.
[TEMP CHECK] Onboard EIGEN to Aave V3 Ethereum
Vote Result: YES
Rationale
As the governance token for the EigenLayer ecosystem, which has the potential to turn into a value sink with additional use cases of staking and playing an active role in the network’s operations, EIGEN is an interesting token for Aave to consider listing to Ethereum v3. There are certain blockers to listing EIGEN on Ethereum v3 currently, namely the likely low demand to use governance assets as collateral in DeFi, EIGEN not getting much traction as collateral in other venues, and that listing governance tokens as collateral assets in v3 with low caps does not make too much sense from a risk perspective.
Nevertheless, given the likely importance of EIGEN, at this stage we think it merits at least a risk assessment from the risk service providers, even as we acknowledge the limitations of listing governance tokens as collateral in DeFi. Modelling out some of the projected revenues from listing this token could be a valuable exercise even if it may be more practical to list it at a later stage.
Therefore, we will (tentatively) vote YES in favour of this proposal.
Increase cbBTC Supply Caps
Vote Result: YES
Rationale
Increasing the cbBTC supply cap will ensure that the asset is not deposited in other lending markets and Aave can attract more users and capital to its ecosystem without restricting their activities. Chaos Labs is in favour of the increase on both Ethereum and Base, and Aave is poised to earn greater revenue given the increasing demand for cbBTC. Therefore, we will vote YES in favour of this proposal.
[ARFC] Renew LlamaRisk as Risk Service Provider
Vote Result: YES
Rationale
As we mentioned in our comment, LlamaRisk’s quality of analysis is fantastic, as are the different dimensions their analysis provides in terms of legal and regulatory opinions. The legal research is extremely relevant, especially given how Aave is moving closer to RWAs with the BUIDL/USTB GSMs. The team has also been great to interact with and provide a lot of differentiated value to the DAO. The scope is reasonable and so is the price given the value added by LlamaRisk to Aave.
Therefore, we will vote YES in favour of this proposal.
[ARFC] Continuous Security Proposal Aave <> Certora
Vote Result: YES
Rationale
As we mentioned in our comment, we are in support of this proposal; Certora has been an invaluable partner to the Aave DAO and renewing their services is necessary to ensure the continued security of the Aave protocol. Therefore, we will vote YES in favour of this proposal.
3.2 Patch for Legacy Periphery
Vote Result: YES
Rationale
This is a technical proposal that will make it simpler for integrators to utilise the Aave protocol. Certora has reviewed the code and has provided a green light. Therefore, we will vote YES in favour of this proposal.
[ARFC] Chaos Labs <> Aave Risk Management Service Renewal
Vote Result: YES
Rationale
As in our comment on the renewal post, we are firmly in favour of renewing Chaos Labs’ engagement for the next year and will vote YES in favour of this proposal.
[ARFC] Remove Frax from Isolation Mode on Aave v3 Mainnet
Vote Result: ABSTAIN
Rationale
Given the greater collaboration between between Aave and FRAX, major updates to security on sfrxETH, the addition of GHO to Frax Lend, on-chain liquidity for the asset improving significantly since July 2024, and both risk providers being in favour, we think there are more points in favour of voting to remove FRAX from isolation mode this time around. However, our points in the previous ARFC stand and as LlamaRisk has validated, there are no significant changes in the protocol structure. This is concerning and the Frax team has not responded, which makes us slightly wary of completely changing our vote and voting in favour. Therefore, we will still vote ABSTAIN on this proposal in lieu of comments from the Frax team on LlamaRisk’s analysis.
[TEMP CHECK] Add rlUSD to Aave v3 Main Market on Ethereum
Vote Result: YES
Rationale
Given the imminent launch of rlUSD, combined with the stablecoin being expected to receive NYDFS regulatory approval and the roster of partnerships Ripple has established with numerous crypto exchanges, it makes sense to explore the addition of rlUSD on Aave v3 Ethereum. Therefore, we will vote YES in favour of this proposal.
[ARFC] Launch GHO on Avalanche & Set ACI as Emissions Manager for Rewards
Vote Result: YES
Rationale
We are in favour of launching GHO across networks and Avalanche has seen stablecoin borrows that mirror those on Arbitrum. GHO brings in new users to Aave, which is crucial, and the analysis from LlamaRisk that these users demonstrate higher engagement with other DeFi protocols than regular Aave v3 users, combined with lower liquidation rates, is necessary for the protocol to grow. We think GHO is ready for further expansion and the liquidity trends are very positive. Both risk providers are also in favour. Therefore, we will vote YES in favour of this proposal.