[ARFC] Add CRV to Ethereum v3

title: [ARFC] Add CRV to Ethereum v3
Author:@Llamaxyz - DeFi_Consulting (@MatthewGraham), @dydymoon
Dated: 2023-02-01


This proposal presents Aave the opportunity to onboard CRV to the Ethereum v3 Liquidity Pool.


CRV is a strategic asset to Aave and any CRV earned from the pool could be used by Aave to create veCRV for the purpose of bootstrapping the adoption of GHO, the new staked aToken being developed by @AaveLabs and in the long term, might help incentivize the Safety Module too.

The risk parameters provided within are the same as those provided by Gauntlet within the initial forum post discussing which assets to onboard to v3 Ethereum.

By presenting each asset to be onboarded to v3 Ethereum individually, the community can focus on a specific asset, with individual Snapshots determining how to proceed. Finally, approved assets listings can be grouped for the on-chain AIP vote.


Listing CRV on Aave v3 Ethereum compliments the community’s recent on-market purchase of CRV to repay the excessive debt created on v2 Ethereum. CRV is a material contributor to Aave’s revenue through the continual borrowing demand for CRV. Month on Month revenue has fallen significantly as a result of disabling borrowing on the Ethereum v2 deployment.

There is strong ongoing borrowing demand for CRV due to the veTokenomics and the extrinsic use cases created by Convex Finance and projects built on top of veCRV. The chart below shows how freezing the CRV on Polygon v2 and disabling boring on Ethereum v2 during late November 2022 has affected deposit rates on Polygon v3. The Polygon v3 deployment is the only liquidity pool with Borrowing enabled, as a result there has been notable volatility in deposit rates.

By listing CRV on Ethereum v3, with Borrowing Enabled and a suitable BorrowCap users will have the ability to migrate from v2 to v3 and borrow CRV, generating revenue for Aave. Any CRV earned by Aave can be used to create veCRV, assuming Aave has access to the Curve voter escrow contract, which can then be used to vote CRV incentives to any combination of pools chosen by the community. How the CRV will be used is open for Aave to discuss and implement via a future proposal.

For listing CRV, this proposal uses risk parameters suggested by Gauntlet on the original [ARC] Aave v3 Ethereum Deployment: Assets and Configurations post. The interest rate curve parameters have been sourced from @Llamaxyz’s [ARFC] CRV Interest Rate Curve Upgrade post, which is soon to be presented on Snapshot for voting.


Ticker: CRV

Contract Address: 0xD533a949740bb3306d119CC777fa900bA034cd52

Risk Parameter Value
Isolation Mode YES
Enable Borrow YES
Enable Collateral YES
Loan To Value 55.0%
Liquidation Threshold 61.0%
Liquidation Bonus 8.3%
Reserve Factor 20.0%
Liquidation Protocol Fee 10%
Borrow Cap 7.7m
Supply Cap 62.5m
Debt Ceiling 20.9m
Variable Base 3.0%
Variable Slope1 14.0%
Variable Slope2 300
Uoptimal 70.0%
Stable Borrowing Disabled
Stable Slope1 8%
Stable Slope2 300%
Base Stable Rate Offset 3
Stable Rate Excess Offset 5
Optimal Stable To Total Debt Ratio 20

Note: Stable borrowing is disabled, however parameters are provided in case enabled at a later date without amending other parameters specific to stable borrowing. The last 6 rows in the table above are to be confirm Gauntlet.


Copyright and related rights waived via CC0.


Hi @Pauljlei,

Would it be possible for Gauntlet to comment on this proposal given the initial parameters are derived from the aave v3 ethereum deployment assets and configurations publication?

This proposal has been on the forum for greater than the 5 day discussion window and we would like to progress the proposal to Snapshot, unless there are any comments to be incorporated.


Thanks @Llamaxyz - we are re-evaluating the parameters, in accordance with updated market conditions, and aim to comment on this proposal within the next few days.


I do support this proposal.

I don’t think we should worry anymore about what happened last year with Aave V3 and the risk parameters suggested by Gauntlet.

Hello, I’m seeing a trend with weird numbers on AIPs recently. Is there a particular reason? Does Aave break apart if the liquidation Bonus is 11% or 10.5%?
Does the 7th gate of hell open and eat us all if the debt ceiling is 21M?

Please do round numbers, it leads to cleaner, more readable code and maybe fewer mistakes.

Outside of these grumpy remarks, the ACI is supportive of this proposal and is waiting for risk teams recommendations before forming a definitive opinion.


Gauntlet Recommendations

We recommend updating the borrow caps to 7.7M (from 25M) and the supply caps to 62.5M (from 140M), given updated market conditions and our updated methodology. We note that these follow the Aggressive assumption, given that this proposal is to add CRV on ETH Mainnet.

We also recommend changing the LB to 8.3% per our original proposal.

Hi @Pauljlei,

Thank you for the feedback.

We will now progress this proposal to Snapshot:


Hi Everyone :wave:

The Snapshot vote finished with overwhelming support for adding CRV to Ethereum v3. @Llamaxyz will begin preparing the AIP for vote.

Thank you to everyone who participated in the vote.

Hi Everyone :wave:

The Add CRV to Ethereum v3 proposal is now past the peer review stage and will be presented shortly as an AIP to the community.