EURe Emissions Manager
Vote Result: YES
Rationale
This is a simple proposal as per the direct-to-AIP Emission Manager Framework update that we voted in favour of according to our rationale here. Therefore, we will vote in favour of this proposal as well.
Borrow Cap Reductions on Aave V3 Ethereum
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.
TUSD and BUSD Aave V2 Rate Amendments
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.
Update WETH IR on V3 Arbitrum and Optimism
Vote Result: YES
Rationale
Given the trend observed by Chaos Labs, if the WETH borrow rate decreases further, the market will become more efficient and WETH borrows will increase, leading to higher revenue for the protocol at a similar level of risk, given that Aave prices stETH:ETH 1:1 with the underlying exchange rate and low liquidation risk exists in potential wstETH market price movements. The suggested change from Chaos Labs can potentially increase utilisation on the Arbitrum and Optimism markets and increase revenues by ~$50K. Therefore, we will vote YES in favour of this proposal.
ReserveFactorUpdates
Vote Result: YES
Rationale
This is another in a series of updates to the RF on Polygon v2 which we previously voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
StablecoinIRUpdates
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. Given that stablecoin interest rates have remained volatile due to high utilisation, and the DSR APR being 13%, these parameters still make sense and therefore, we will vote YES in favour of this proposal as well.
Native Bridge Adapters Update
Vote Result: YES
Rationale
This is a simple proposal to add some small improvements to the Native bridge adapters used on a.DI and has been reviewed by Certora. Therefore, we will vote YES in favour of this proposal.
Generalized LT/LTV Reduction on Aave
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. 232 total accounts amounting to ~$19K are at risk of liquidation following the proposed changes, which has been communicated well in advance. Therefore, we will vote YES in favour of this proposal as well.
Upgrade AMPL Implementation
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 wbETH to Aave v3 BNB Chain
Vote Result: YES
Rationale
This is the ARFC for this Snapshot TEMP CHECK that we voted in favour of according to our rationale here. Chaos Labs has provided initial risk parameters. Therefore, we will vote YES in favour of this proposal.
[ARFC] Onboard sUSDe to Aave V3 on Ethereum
Vote Result: YES
Rationale
This is the ARFC for this Snapshot TEMP CHECK that we voted in favour of according to our rationale here. Chaos Labs’ rationale for the risk parameters makes sense; sUSDe does have a lot of inherent risk and we think this asset must be treated with caution. We especially think the effect of a short squeeze and potentially consistent negative short funding rates due to the level of Ethena’s short open interest should not be ignored, and think that this asset requires constant monitoring and changes to its risk parameters on a regular basis to avoid any issues further down the line. Listing sUSDe on Aave is beneficial and we have confidence in the risk being managed appropriately by the risk manager(s).
[ARFC] Risk Parameters for DAI Update
Vote Result: YES - CONSERVATIVE
Rationale
The conservative option is more prudent based on Chaos Labs’ analysis since the theoretical implied D3M risks are modest at its current scale. However, there is a need to change parameters due to this move by MakerDAO and Ethena does pose risks. The methodology to reduce LTV by 12% linearly since the maximum implied % of total DAI backing by sUSDe is 12% seems logical to us. Linearly reducing LTV as total DAI backing by sUSDe increases is also sensible. Reducing LT gradually also makes sense and avoids unnecessary liquidations while giving the community time to react with advance notice. The aggressive option does not make sense since temporarily reducing LTV to 0% does not hold much value, and reducing LT by 2% immediately is quite a drastic move given the analysis presented.
Therefore, we will vote YES in favour of the CONSERVATIVE option.
[ARFC-Addendum] Update Boosters & Diluters for Merit Round 2
Vote Result: YES - CONSERVATIVE
Rationale
Removing the booster for sDAI at this point is fair given Maker’s recent governance decisions and rewarding users for holding sDAI does not make sense. We agree with the decision to also not dilute users for holding sDAI. It is too aggressive to penalise users for using Spark or Morpho Blue since these protocols are different to the Morpho Optimizer, since using the Optimizers directly diverts from Aave protocol revenues. Using Spark and Morpho Blue is different and we are wary of unnecessarily restricting user choice by diluting rewards.
Therefore, we will vote YES in favour of the CONSERVATIVE option.
Reserve Factor Updates
Vote Result: YES
Rationale
This proposal is a continuation of the increase of RF on Ethereum V2 that we voted in favour of on this AIP with our rationale here. It also aims to start periodically increasing the RF on Avalanche V2 which we voted in favour of on this Snapshot ARFC according to our rationale here. Therefore, we will vote YES in favour of this proposal.
weETH Onboarding
Vote Result: YES
Rationale
This is the on-chain vote 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.
[ARFC] Polygon v2 Borrow Rate Adjustments
Vote Result: YES
Rationale
Increasing borrow rates across Polygon v2 is necessary - it is critical for users to migrate to v3 and we should utilise all tools at our disposal to ensure they do so. These changes have been communicated well in advance and will not trigger any liquidations of user funds. Remaining on v2 is not logical and migrating to v3 is simply a better option for the DAO and users. Therefore, we will vote YES in favour of this proposal.
Interim aAMPL Distribution
Vote Result: YES
Rationale
This is the on-chain proposal for this Snapshot ARFC and this AIP that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
weETH Arbitrum Onboarding
Vote Result: YES
Rationale
Adding weETH to v3 Arbitrum is logical given the onboarding of weETH to v3 Ethereum. Chaos Labs has provided their recommendations with conservative initial caps, which is a good idea. Therefore, we will vote YES in favour of this proposal.
[ARFC] Chaos Labs Risk Parameter Updates - OP on V3 Optimism
Vote Result: YES
Rationale
Increasing OP’s LT and LTV on v3 Optimism to match ARB’s parameters on Arbitrum make sense especially given that both assets have similar supply and liquidity profile. The initial conservative parameters served their purpose when OP was first listed and as the asset’s profile has evolved, its parameters on Aave should change accordingly. Given that collateral at risk does not exceed $100K until OP’s price falls by 35%, and that its largest single-day price drop has been 17.7%, it seems reasonable to increase LT/LTV. Therefore, we will vote YES in favour of this proposal.
[ARFC] - Chaos Labs Engagement Amendment
Vote Result: YES
Rationale
Chaos Labs is a great team to work with and the $400k addition seems reasonable given that they are the only risk providers to the DAO at the moment and given the quality of their analysis. Market conditions have improved and Aave profits have increased as well. The new risk provider will be onboarded at a lower cost than Gauntlet was charging and Chaos have taken on quite a lot of out-of-scope work for the DAO already, so it is fair to increase their compensation. Therefore, we will vote YES in favour of this proposal.