[ARFC] Add LUSD to Optimism V3 Market

title: [ARFC] Add LUSD to Optimism V3 Market

Author: @marczeller - Aave-Chan Initiative

Dated: 2023-01-31


This proposal presents Aave with the opportunity to onboard LUSD to the Ethereum v3 Optimism Liquidity Pool.


LUSD is a decentralized stablecoin minted by the Liquity protocol. For more details about LUSD please refers to Aave V3 ARC by ACI.


Supporting stablecoin diversity is part of the Aave-Chan Initiative (ACI) delegate platform. The risk parameters provided are the same as those adopted on the ETH V3 pool.

The newly proposed risk parameters replicating the LUSD parameters on L1 are merely suggestions to start the conversation. The ACI is inviting Risk Service Providers to provide feedback on them.

LUSD is a growing stablecoin within the Optimism ecosystem, with liquidity mainly located in Velodrome Stableswap pools.


Ticker: LUSD

Contract Address: 0xc40F949F8a4e094D1b49a23ea9241D289B7b2819

Risk Parameter Value
Isolation Mode NO
Enable Borrow YES
Enable Collateral NO
Loan To Value N/A
Liquidation Threshold N/A
Liquidation Bonus N/A
Reserve Factor 10%
Liquidation Protocol Fee N/A
Borrow Cap 1,210k
Supply Cap 3,000k
Debt Ceiling N/A
Base 0%
Slope1 4%
Uoptimal 80%
Slope2 87%


The ACI is not affiliated with Liquidity or any other entity and has not received payment to present this ARFC.

At the time of writing, Marc Zeller, the founder of ACI, does not possess any LQTY, the native asset of the Liquity protocol, and holds only a small amount of LUSD.


Copyright and related rights waived via CC0.


Thanks for posting this proposal @MarcZeller / ACI.

I am available if the community has any questions regarding LUSD on Optimism.



The ACI just escalated this proposal to Snapshot stage, vote starts tomorrow.

The Aave-chan Initiative usually recommends waiting for a risk service provider team to give their feedback before escalating proposals. However, in this case, there were no concerns raised by the community about the ARFC proposal, which involves adding non-collateral assets. Therefore, it was considered acceptable to proceed with the proposal without waiting for feedback from the risk service provider team.

That being said, at any point during the snapshot stage & potential AIP stage of the proposal, @ChaosLabs & Gauntlet feedback will be welcomed.

With LUSD being proposed to be listed as a non-collateral asset, Chaos Labs supports the listing with the proposed supply and borrow caps.

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