# \[ARFC\] Add MAI to Optimism Aave V3 pool
**URL:** https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765
**Category:** Governance
**Created:** [April 13, 2023, 4:25pm UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765 "2023-04-13T16:25:53Z")
**Posts on this page:** 8
**Page:** 1
### Author:  [@MarcZeller](https://governance.aave.com/u/MarcZeller)
#### Post date: [April 13, 2023, 4:25pm UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/1 "2023-04-13T16:25:54Z")
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## Title: [ARFC] Add MAI to Optimism Aave V3 pool Author: @marczeller - Aave-Chan Initiative Date: 2023-04-13
# Summary
This proposal presents Aave with the opportunity to onboard MAI to the Optimism Aave V3 Market.
# Abstract
MAI is a decentralized stablecoin minted by the Qidao Protocol. For more details about MAI, please refer to [Qidao’s official website](https://www.mai.finance/).
# Motivation
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 Polygon PoS Aave V3 Pool.
The newly proposed risk parameters replicating the MAI parameters on Polygon V3 pool are merely suggestions to start the conversation. The ACI is inviting Risk Service Providers to provide feedback on them.
# Specification
Ticker: MAI
Contract Address: 0xdFA46478F9e5EA86d57387849598dbFB2e964b02
| Risk Parameter | Value |
| --- | --- |
| Isolation Mode | YES |
| Enable Borrow | YES |
| Enable Collateral | YES (in isolation mode) |
| Loan To Value | 75% |
| Liquidation Threshold | 80% |
| Liquidation Bonus | 5% |
| Reserve Factor | 20% |
| Liquidation Protocol Fee | 10% |
| Borrow Cap | 1,200k |
| Supply Cap | 2,200k |
| Debt Ceiling | 2,000k |
| Base | 0% |
| Slope1 | 4% |
| Uoptimal | 80% |
| Slope2 | 75% |
# Disclaimer
The ACI is not affiliated with Qidao or any other entity and has not received payment to present this ARFC.
At the time of writing, the author (@marczeller) owns QI & vQI, the native asset of the Qidao Protocol, for ~50k$. The author was not paid to publish this ARFC.
# Next Steps
1. If consensus is reached and the proposal is refined, submit the ARFC for a snapshot vote for final approval.
2. If consensus is reached, submit an Aave Improvement Proposal (AIP) to onboard MAI on the Optimism Aave V3 pool.
# Copyright
Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).
---
### Author:  [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)
#### Post date: [April 20, 2023, 12:04am UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/2 "2023-04-20T00:04:22Z")
Chaos Labs supports the proposal to onboard MAI to V3 Optimism with the following parameters:
| Risk Parameter | Value |
| --- | --- |
| Isolation Mode | YES |
| Enable Borrow | YES |
| Enable Collateral | YES (in isolation mode) |
| Loan To Value | 75% |
| Liquidation Threshold | 80% |
| Liquidation Bonus | 5% |
| Reserve Factor | 20% |
| Liquidation Protocol Fee | 10% |
| Borrow Cap | 1,200k |
| Supply Cap | 2,200k |
| Debt Ceiling | 2,000k |
| Base | 0% |
| Slope1 | 4% |
| Uoptimal | 80% |
| Slope2 | 75% |
Liquidity on Optimism is better than that on [Arbitrum](https://governance.aave.com/t/arfc-add-mai-to-arbitrum-aave-v3-market/12759/2), leading us to adopt the parameters proposed by @MarcZeller, which are identical to the ones from the Polygon deployment.
We updated the reserve factor to 20% to match that of Polygon.
## **Overview**
Chaos Labs supports listing MAI in Isolation Mode as part of an overarching strategy to increase the offering of AAVE protocol with more volatile assets. As a low market cap asset, MAI is susceptible to price manipulation, so listing it with an appropriate debt ceiling is crucial to prevent a profitable pump attack.
## Liquidity and Market Cap
When analyzing market cap and trading volumes of assets for listing, we look at data from the past 180 days. The average market cap of MAI over the past 180 days was $46.6M, and the average daily trading volume was $3.8M (CeFi & DeFi). We find the market cap adequate and the trading volumes reasonable as long as they are considered when setting appropriate supply caps, a debt ceiling, and borrow caps.
## **Liquidation Threshold**
Analyzing MAI price volatility over the past, we observed daily annualized volatility of 5.66% and 30-day annualized volatility of 2.51%. Considering this volatility and the history of MAI on other networks, we support the suggested LT of 80%.
We support listing MAI as borrowable under reasonable limits of supply cap, as we do not observe a significant risk to the protocol by allowing to borrow MAI, as long as it is bound by a well-defined cap.
## **Debt Ceiling**
Following [Chaos Labs’ Isolation Mode Methodology](https://governance.aave.com/t/chaos-labs-isolation-mode-methodology/12440), we support the initial debt ceiling of $2M.
## **Supply Cap, Borrow Cap, and Liquidation Bonus**
Given the concentrated liquidity of MAI on Optimism we recommend a 5% Liquidation Bonus and support the proposed initial supply cap of 2.2M and borrow cap of 1.2M
---
### Author:  [@MarcZeller](https://governance.aave.com/u/MarcZeller)
#### Post date: [April 20, 2023, 9:13am UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/3 "2023-04-20T09:13:34Z")
This proposal has been escalated to [Snapshot stage](https://snapshot.org/#/aave.eth/proposal/0x5c5de0a7cb87170f6b0f28da20c079f9c89350125fffa9f80e0f60cc3c9d43ea)
---
### Author:  [@GarrettPetersen](https://governance.aave.com/u/GarrettPetersen)
#### Post date: [April 21, 2023, 11:49pm UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/4 "2023-04-21T23:49:20Z")
# Gauntlet Parameter Recommendations
The following table contains Gauntlet’s recommended initial parameters for MAI on Optimism. We include Chaos’s recs so that the community can easily compare them, and highlight differences in **bold**.
| Risk Parameter | Gauntlet Rec | Chaos Rec |
| --- | --- | --- |
| Isolation Mode | YES | YES |
| Enable Borrow | YES | YES |
| Enable Collateral | YES | YES |
| Loan To Value | 75% | 75% |
| Liquidation Threshold | 80% | 80% |
| Liquidation Bonus | 5% | 5% |
| Reserve Factor | 20% | 20% |
| Liquidation Protocol Fee | 10% | 10% |
| Borrow Cap | **2,500,000** | **1,200,000** |
| Supply Cap | **7,600,000** | **2,200,000** |
| Debt Ceiling | **$1,900,000** | **$2,000,000** |
| Base | 0% | 0% |
| Slope1 | 4% | 4% |
| Uoptimal | 80% | 80% |
| Slope2 | 75% | 75% |
MAI is an overcollateralized stablecoin backed by collateral in user-managed vaults, similar to DAI.
MAI has previously been listed on Aave V3 Avalanche and Aave V3 Polygon. For the initial MAI listing on Optimism, we follow many of the same parameters that it has on other chains.
We recommend the following parameters for MAI on Aave V3 Optimism:
**Isolation Mode - Yes**
**Borrowable - Yes**
**Collateral Enabled - Yes**
**eMode - No**
### Supply and Borrow Caps
**Supply Cap (in tokens) - 7,600,000 / Borrow Cap (in tokens) - 2,500,000**
These caps are determined using Gauntlet’s [supply and borrow cap methodology](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487).
### Debt Ceiling $1,900,000
Gauntlet recommends starting the debt ceiling at 10% of the token’s on-chain circulating supply. The circulating supply is $19M, so gauntlet recommends a debt ceiling of $1.9M.
#### LTV - 75% / LT - 80%
Gauntlet recommends the same LTV and LT on Optimism as on Polygon and Avalanche, given the similar profiles of these markets.
#### Liquidation Bonus - 5%
Gauntlet recommends the same Liquidation Bonus on Optimism as on Polygon and Avalanche, given the similar profiles of these markets.
#### Liquidation Protocol Fee - 10%
Gauntlet recommends an LPF of 10%, matching the LPF for MAI on Polygon and Avalanche.
#### Reserve Factor - 20%
Gauntlet recommends a reserve factor of 20% for MAI on Optimism, matching the RF on Polygon and Avalanche.
#### IR Curves
We recommend the same IR curves used for MAI on Polygon and Avalanche:
| Parameter | Recommendation |
| --- | --- |
| Base Variable Borrow Rate | 0% |
| Variable Rate Slope 1 | 4% |
| Optimal Usage Ratio | 80% |
| Variable Rate Slope 2 | 75% |
---
### Author:  [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)
#### Post date: [April 27, 2023, 2:32pm UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/5 "2023-04-27T14:32:41Z")
As the main differences between the proposals are the supply and borrow cap, we support moving forward with the Gauntlet recommendations. Utilizing our updated supply cap methodology, we approve the suggested caps for the initial launch.
| Risk Parameter | Recommendation |
| --- | --- |
| Isolation Mode | YES |
| Enable Borrow | YES |
| Enable Collateral | YES |
| Loan To Value | 75% |
| Liquidation Threshold | 80% |
| Liquidation Bonus | 5% |
| Reserve Factor | 20% |
| Liquidation Protocol Fee | 10% |
| Borrow Cap | 2,500,000 |
| Supply Cap | 7,600,000 |
| Debt Ceiling | $1,900,000 |
| Base | 0% |
| Slope1 | 4% |
| Uoptimal | 80% |
| Slope2 | 75% |
---
### Author:  [@MarcZeller](https://governance.aave.com/u/MarcZeller)
#### Post date: [May 5, 2023, 10:34am UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/6 "2023-05-05T10:34:53Z")
The ACI acknowledge this consensus solution provided by risk service providers and will shortly publish an AIP incorporating them.
---
### Author:  [@MarcZeller](https://governance.aave.com/u/MarcZeller)
#### Post date: [May 8, 2023, 4:53pm UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/7 "2023-05-08T16:53:38Z")
the proposal has been escalated to [AIP stage](https://app.aave.com/governance/proposal/?proposalId=218), voting starts tomorrow
---
### Author:  [@bgdlabs](https://governance.aave.com/u/bgdlabs)
#### Post date: [June 6, 2023, 7:17am UTC](https://governance.aave.com/t/arfc-add-mai-to-optimism-aave-v3-pool/12765/8 "2023-06-06T07:17:11Z")
Related with this listing, an update here [[ARFC] Add MAI to Arbitrum Aave V3 Market - #8 by bgdlabs](https://governance.aave.com/t/arfc-add-mai-to-arbitrum-aave-v3-market/12759/8)