[ARFC ADDENDUM] Modify E-Modes for PT Token Collateral

[ACI]

[ARFC ADDENDUM] Modify E-Modes for PT Token Collateral

Author: ACI & Chaos Labs

Date: 2025-05-20

Summary

This ARFC Addendum proposes an update to the Onboard Pendle PT tokens to Aave V3 Core Instance ARFC. To facilitate rollovers for the PT tokens, we propose that the underlying asset be added to the E-mode as collateral for existing and future PT tokens. The benefit of this is that at maturity, depositors can seamlessly migrate to the underlying asset and then migrate manually to the next maturity if they would like to.

Motivation

Pendle PT tokens are unique amongst Aave collateral in that they have a maturity date. At the maturity date, the PT token converts to the underlying, and depositors are likely to want to migrate to a new maturity PT token for the same asset. To work towards smoothing this migration, we propose that the underlying PT asset be added to each of the E-modes. Depositors can then migrate to the underlying and manually move to the next PT token maturity.

Specification

We propose the following E-modes to be adjusted:

PT	E-mode	Underlying Asset
eUSDE-29MAY2025	Stablecoins	eUSDe
sUSDE-31JULY2025	Stablecoins	sUSDe
USDE-31JULY2025	Stablecoins	USDe
USDE-31JULY2025	USDe	USDe
eUSDE-14AUG2025	Stablecoins	eUSDe
eUSDE-14AUG2025	USDe	eUSDe

Moreover, we recommend an adjustment of the previously recommended supply cap for the listing of eUSDe to absorb the 500M in maturing PT supply:

Asset	Previously Recommended Supply Cap	Recommended Supply Cap
eUSDe	150,000,000	550,000,000

Disclaimer

The ACI is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC.

Next Steps

1. The Addendum will be considered canon, and the guidelines will be adopted into the Asset Onboarding Framework.

Copyright

Copyright and related rights waived via CC0.

[CryptoScam]

That’s a nice proposal I requested couple of times without getting any feedback on it.
Given eUSDe is not listed yet on Aave, and that it is a USDe wrapper, could we add USDe as Underlying Asset to the PT-eUSDE e-Mode to allow tapping in the USDe supply lent on Aave?

[LlamaRisk]

Summary

LlamaRisk supports adding underlying assets of their PT counterparts to the dedicated E-Modes. This adjustment has already been initialized within the latest PT-eUSDe August Expiry Onboarding proposal and confirmed via the corresponding AIP. We believe that supporting this change for the rest of the tokens will further improve the PT token yield leveraging utility on Aave’s Core market while keeping the risks unchanged. This change would also have a positive effect on the maturity migration experience, letting users migrate the debt without having to tap into secondary market liquidity.

While the PT underlying E-Mode serves to provide efficiency improvements, it is important to set an adequate LTV vs. LT buffer so that any downward changes in the linear discount rate would not result in liquidations for the most aggressive looping positions. This risk is mitigated by aligning the risk oracle’s LTV/LT increases with the expected maximal oracle price deviation at different time-to-maturity durations. We will continue monitoring the positions and the PT oracle price changes.

We also support the increase of eUSDe supply cap. Nonetheless, we have yet to see the liquidity migration to the new PT-eUSDe maturity pool, therefore we recommend implementing the PT-eUSDe August maturity token supply cap changes via Risk Stewards as the liquidity situation allows it.

PT and Underlying Asset E-Mode

The PT underlying E-Modes will provide more efficiency via a larger PT vs. base asset correlation, eliminating secondary market peg risks encountered when leveraging PTs with unrelated stablecoins. However, the main direct improvement is expected to be the ability to migrate the debt collateralized by PTs tokens to a new maturity without having to be exposed to secondary market liquidity.

This adjustment will also be naturally reflected for eUSDe PT tokens, as the integration of eUSDe token on Aave’s Core market has been confirmed and will be deployed tomorrow (27th of May, 2025). Alternatively, PT-eUSDe pools on Pendle also allow redeeming for USDe directly. This has lead to a more efficient E-Mode setup being proposed together with eUSDe August Expiry PT Tokens deployment. It can be expected that an equivalent PT-underlying E-Mode setup would be proposed for other PT tokens in future ARFCs.

PT-eUSDe August Maturity

The old maturity PT-eUSDe-29MAY2025 will expire in 2 days. Therefore, a large part of users using this pool will be migrating to a new PT-eUSDe-14AUG2025 pool. At the time of writing, the full transition of liquidity has not started yet, with $59M of liquidity currently residing in the new pool in comparison with the $143M liquidity in the May maturity pool. It remains to be seen when the liquidity providers start to shift. As soon as this transition happens, Aave will be ready to accommodate new inflows.

Source: LlamaRisk, May 26th, 2025

Disclaimer

This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk LlamaRisk serves as Ethena’s Risk Committee member and an independent attestor of Ethena’s PoR. LlamaRisk did not receive any compensation from the protocol(s) or their affiliated entities for this work.

The information provided should not be construed as legal, financial, tax, or professional advice.