[ARFC] LT/LTV Reductions on Aave V2 Stablecoins
Vote Result: CONSERVATIVE
Rationale
Reducing LT/LTVs conservatively makes sense and incurring a significantly high level of liquidations via the aggressive option punishes users unnecessarily. Reducing LT by 0.5% for USDC on Ethereum does not make a material difference and the pain caused to Aave users is much higher. Incurring $10k of liquidations each for USDC.e on Polygon and Avalanche is acceptable. Therefore, we will vote for the CONSERVATIVE option.
[ARFC] Safety Module stkGHO - Rewards Adjustment
Vote Result: YES
Rationale
stkGHO holders can get more predictable rewards via this upgrade to the Safety Module stkGHO rewards. It is sensible to bet on the success of GHO, especially with the GHO cap potentially increasing with the peg becoming more stable and the use cases of GHO across DeFi growing. Increasing the AAVE emissions runway is also better for tokenholders and reduces AAVE inflation, which is a longer-term positive. A risk is obviously if GHO revenue does not match up to the emissions, but this can be amended by another governance vote. We expect this to become much clearer as time goes on, but given the importance of GHO to Aave now, this would have a much broader impact on the protocol and knowing @karpatkey_TokenLogicâs expertise, they will more than likely become aware of this in advance. Therefore, we will vote YES in favour of this proposal.
Reserve Factor Upgrades
Vote Result: YES
Rationale
This is the latest in the series of RF updates for Avalanche v2 that we have voted in favour of previously. Therefore, we will vote YES in favour of this proposal as well.
April Finance Update
Vote Result: YES
Rationale
Executing these transactions is necessary for the DAO to pay its service providers and conduct various treasury functions, and we will vote YES in favour of this proposal.
[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. It will be important for the risk providers to accurately judge these risks in terms of the parameters for rsETH and tackle the issues of the exchange rate complication and withdrawals. Therefore, we will vote YES in favour of this proposal and await the risk providersâ analysis.
[TEMP CHECK] Add AERO to Base V3 Reproposal
Vote Result: YES
Rationale
This is a re-proposal of this Snapshot TEMP CHECK that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
osETH 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 as well.
[ARFC] Fund USDC & USDT GSM
Vote Result: YES
Rationale
Funding the GSM will further protect the GHO peg and mitigate the impact of stkGHO being withdrawn from the Safety Module. Withdrawing 1M USDC and USDT is a good idea to enable speed of movement and reduce any time lags when the GSM needs to be funded. Therefore, we will vote YES in favour of this proposal.
[ARFC-Addendum] Update Merit for Round 4
Vote Result: YES
Rationale
Making the Merit program more targeted towards wETH whales and getting them to use Aave instead of other protocols is logical. Continuously adjusting the program based on its performance to date makes sense. We agree with the dilution for Morpho users but also want the question posed by @midapple answered: why is the Morpho vault from LlamaRisk acceptable? At the very least, some more information should be provided around this potential conflict of interest.
All in all, we will vote YES in favour of this proposal.
2 Likes
[ARFC] Aave V3 Deployment on Celo
Vote Result: YES
Rationale
We will vote YES in favour of this proposal for the following reasons:
- Celo is a chain which has a differentiated user base to that of Aave with a lot of DAU which can be brought to Aave.
- They have access to a lot of users who hold stablecoins in the Opera MiniPay wallet and have a need for yield which they will aim to natively integrate with Aave, potentially bringing a lot of usage.
- They have earmarked funds for incentives for activity, higher than any other protocol that Aave is looking to deploy on has in the past.
- Their focus on RWAs is great and it aligns well with what is outlined in Aave v4 and Aave 2030.
- They are much more âvalue-alignedâ now as an L2 rather than another L1.
- There is a lack of competition especially for USDC and USDT on Celo which will immediately position Aave as the leader on Celo.
- Chaos Labs has provided appropriate risk parameters for the proposed assets.
1 Like
[ARFC] GHO Cross-Chain Launch
Vote Result: YES
Rationale
As we voted for in the previous GHO Cross-Chain Launch proposals here and here according to our rationales here and here, we are in favour of deploying GHO on Arbitrum using CCIP. Therefore, we will vote YES in favour of this proposal.
Chaos Labs Ethereum V2 LT Reductions
Vote Result: YES
Rationale
As we voted in favour of on this AIP according to our rationale here, we are in favour of reducing LT on Ethereum v2 and will therefore vote YES in favour of this proposal as well.
Deprecation of Small-cap Stablecoins on V2 Ethereum
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 as well.
[ARFC] Aave Finance Steward
Vote Result: YES
Rationale
Enabling the Finance Steward will reduce governance burden and make the actions taken by the Aave Finance team much more efficient. We think the tasks outlined are fair and the limitations, especially around pre-approving the token swaps and addresses to transfer to, will ensure checks and balances for the DAO. The Risk Steward already exists and this is as efficient as that system. Therefore, we will vote YES in favour of this proposal.
1 Like
sUSD Risk Parameters Update
Vote Result: YES
Rationale
Given the sUSD depeg on May 16, it is prudent for the moment to reduce LTV from 60% to 0%, and temporarily freeze the sUSD reserve on Aave V3 Optimism as a precautionary measure. This will prevent any additional growth of leverage and will not impact any existing positions, ensuring that new sUSD positions cannot be used as collateral. Therefore, we will vote YES in favour of this proposal. Moreover, as the peg has now fully recovered, we are in favour of a new analysis potentially shifting LTV back to its former parameter of 60%, obviously based on analysis from Chaos Labs.
[ARFC] Onboard USDe to Aave V3 on Ethereum
Vote Result: YES
Rationale
Adding USDe to Aave v3 Ethereum on isolation mode makes sense, but the risks of the asset must be taken into keen consideration and observed carefully on an ongoing basis. USDe and Ethena have a ton of risks as mentioned by both Chaos Labs and LlamaRisk. As such, implementing more conservative parameters is necessary and we would not be in favour of any more aggressive parameters, especially at this point in time. Moreover, Chaos Labs and LlamaRisk are both in favour of listing the asset and of the parameters. Therefore, we will vote YES in favour of this proposal.
[TEMP CHECK] Safety Module - Create GHO/USDC E-CLP Category
Vote Result: YES
Rationale
Adding the GHO-USDC E-CLP position to the SM to improve market depth, USDC liquidity within the SM, and providing protection in case of protocol shortfall events will be beneficial for the DAO, especially at this point in time when GHO is trading close to the peg and the GSM is being funded. This seems like the right time to double down on ensuring GHO liquidity and market depth. Moreover, we are glad that the ALC has developed expertise on E-CLP which will help it maximise the benefit from adding the GHO-USDC E-CLP to the SM. Therefore, we will vote YES in favour of this proposal.
[ARFC] Orbit Program Renewal May 2024
Vote Result: YES
Rationale
We are honoured to be selected for the Orbit program again and hope that we have proved our benefit to the DAO to date. We will continue to engage with the DAO as per the principles outlined on our delegate platform, and look forward to continuing our contribution to Aaveâs growth. Therefore, we will vote YES in favour of this proposal.
[ARFC] Onboard tBTC to Aave v3 on Ethereum
Vote Result: YES
Rationale
This is the Snapshot ARFC for this TEMP CHECK that we voted in favour of according to our rationale here. Chaos Labs and LlamaRisk are both in favour of listing the asset on v3 Ethereum. Both risk providersâ analyses are comprehensive and provide good rationales for listing tBTC. Therefore, we will vote YES in favour of this proposal.
[ARFC Addendum] Increase Supply and Borrow Caps for weETH
Vote Result: YES - CONSERVATIVE
Rationale
The LRT ecosystem is not yet mature enough to justify such a large increase in the cap and it would be better to allow the ecosystem to become more mature. For a protocol like Aave especially, gaining an inordinate amount of exposure to the LRT ecosystem at this very early stage poses quite a lot of risk and we would like to be conservative in our approach. Therefore, we will vote YES in favour of the CONSERVATIVE option.