[ARFC] Cancel Llama Service Provider Stream

Governance
1

Proposal Updated for clarity

Title: [ARFC] Cancel Llama Service Provider Stream
Author: Marc Zeller @marczeller - Aave-Chan Initiative
Date: 2023-07-25

Summary

This ARFC proposes to cancel the Llama stream from the Aave DAO

Motivation

Llama has historically been a service provider for the Aave DAO and has made numerous contributions. However, during their tenure, there have been several instances where Llama’s performance has fallen short of expectations.

For instance:

  • Llama’s handling of the crucial CRV AIP was a clear demonstration of their inability to deliver a much-needed payload in a timely manner. The delay in execution resulted in an additional cost of approximately $1 million for the DAO due to the increased valuation of CRV. This incident underscores the need for service providers who can reliably deliver on their commitments and highlights Llama’s underqualification for the task at hand.
  • Despite receiving $1.5 million from the DAO, Llama charged third parties for consulting services related to Aave, including teams seeking asset listings.
  • As treasury managers, Llama failed to ensure that the collector contract had an adequate aUSDC balance. This oversight resulted in several service providers going unpaid for weeks, tarnishing the DAO’s brand and reputation…

Given these circumstances, we believe that the most beneficial course of action for the Aave DAO is to end our relationship with Llama. This will allow the DAO to reassess its needs and budget for a new service provider.

The ACI and other service providers will complete any outstanding tasks from Llama’s engagement at no additional cost to the DAO.

By terminating Llama’s stream early, the DAO treasury can save up to approximately $240k. These funds can then be reallocated to other initiatives, ensuring the most efficient use of the DAO’s resources.

Specification

The AIP will call the cancelStream() method of the Ecosystem Reserve and Aave Collector contracts. The details are as follows:

  • Ecosystem Reserve Contract: 0x25F2226B597E8F9514B3F68F00f494cF4f286491
  • Stream: 100001
  • Aave Collector Contract: 0x464C71f6c2F760DdA6093dCB91C24c39e5d6e18c
  • Stream: 100003
  • Address: 0xb428C6812E53F843185986472bb7c1E25632e0f7

Disclaimer

The Aave-Chan Initiative is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC.

Next Steps

  • Gather community consensus & feedback on this ARFC
  • Snapshot polling vote on the ARFC
  • If the community approves ARFC via Snapshot vote, Publication of an AIP implementation.

Copyright

Copyright and related rights waived via CC0.

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This is a really strange proposal and has several factually incorrect points. It is especially strange considering we have only two months left in our contract.

Here is a sample of critical work we have in progress (either being developed, reviewed internally, or reviewed by BGD):

  • Curator: a dedicated contract for managing the exchange of assets with MEV and price-impact protection, where possible. This will help swap assets, acquire LSTs, and transfer assets. This is public infrastructure that can be used by any Aave contributor for many years to come.
  • Strategic Asset Manager: a dedicated contract for managing Aave DAO’s strategic assets, at launch it will manage the DAO’s veBAL holdings. StrategicAssetManager provides the functionality needed to maximize the DAO’s financial upside while minimizing the DAO governance’s overhead when managing the assets.
    • This is public infrastructure that can be used by any Aave contributor for many years to come.
  • Listing GMX: proposal to list GMX on Arbitrum v3.
  • Treasury management: proposal to rebalance the Aave treasury on mainnet.

As most members of TokenLogic are no longer working at Llama and were responsible for most, if not all, contributions to Aave

This is factually incorrect. Llama’s full-time smart contract engineers, including Fermin Carranza, Rajath Alex, and Austin Green, have worked on 38 proposal payloads. Rajath Alex and @scottincrypto have worked on the Llama data warehouse, which is public and open. @dydymoon is still actively contributing to Llama and has worked on safety module proposals. They are still very much an active part of Llama. Daniel Schlabach, a full-time Llama engineer, has built and continues to maintain and improve the Aave dashboard, which has been used by several Aave contributors, including Aave Companies and we have received a lot of positive feedback on.

There are also many cases of work done by full-time Llama engineers that has been used by other contributors at Aave, such as the interest rate strategy deployer for v3.

Matthew Graham is the only person who has left Llama. He has been a strong contributor, but the reason that he is visible is because he is interfacing with governance. Engineers at Llama are the ones writing the proposal payloads, building the Aave ETL and data warehouse, and creating the backend and frontend services to share this data with Aave community members.

We have just two months left in our contract. The stream will end in the next two months, after which TokenLogic, Aave Chan Initiative, and others can feel free to take on work. We are in progress with critical work that will benefit the community long after our contract ends in two months.

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The Aave Chan Initiative is committed to ensuring a seamless transition as Llama steps away from being a service provider for the Aave DAO. We are ready to extend our engineering resources and proposal power to the Tokenlogic team as part of the Skyward program.

The Aave community can rest assured that all ongoing work will be completed either by Tokenlogic or the ACI. The Aave DAO will not experience any disruption in service, as we are dedicated to maintaining the same level of quality and efficiency.

Despite the increased workload, the ACI will not require any additional budget. We pride ourselves on our ability to deliver actual results without the need for excessive funding.

It’s worth noting that the proposal to list GMX did not meet the differential requirement, so it is not currently pending. As for the treasury management, it is a necessary measure due to Llama’s lack of foresight, which resulted in some service providers being unable to claim their due.

We are grateful for Llama’s contributions to the Aave DAO and wish them the best in their future endeavors.

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We are just very confused about this proposal. As mentioned earlier, we have a number of strategically important proposals for Aave in the works such as the Aave Curator (dedicated contract for managing the exchange of assets with MEV and price-impact protection) and the Strategic Asset Manager (a dedicated contract for managing Aave DAO’s strategic assets). Months of technical research has gone into developing, reviewing, and iterating on these contracts. We have three more analytics dashboards that will be published soon, along with other work that is in progress. In two months, Llama stream will end anyway and we do not plan to renew the contract. We are confused why this would be canceled earlier when we are in progress with critical work that will benefit the Aave community long after our contract ends.

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Hi, tbh i don’t understand why this proposals exists. Llama stated that their contract will end in a few months, they have some work right now, especially regarding the SM. And they stated they don’t want to extend this contract. Imo they should end their open tasks within the few months left and thats fine.
No need to cancel anything now. Of course its up to the DAO.

EDIT: After receiving some more information from DAO member i have been in touch for a long time i have to change my opinion. Checking the contract of the stream we can see that Llama still has a lot left (>200k) which means that they have like 100k left per month till the end of the current contract. This is a huge amount comparing it to the work that is left open (primarily SM changes).

Also comparing it to other service provider this is too much. And after checking Aave | Llama we can see the estimated generated revenue is only 500k, which is quite low to the overall stream they received. Even considering 2m annualized a contract of 1.4m is not relatable.

DAOs have to be efficient and this does not sound efficient.

@Llamaxyz could you please provide a detailed list of what the left funds are needed?

Thank you

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Hi all, we do think this is an aggressive type of action considering only @MatthewGraham left from @Llamaxyz.

On the other hand, we can see that there are some hefty amount of payments left to be sent to @Llamaxyz and if approved by the DAO to be cancelled immediately that could save some important budget.

We also acknowledge that @MarcZeller and @TokenLogic are able of carrying the workload at no extra cost (at least until TokenLogic potentially becomes a Service Provider).
Simultaneously, this move does feel like we’re doing the opposite of decentralisation - by allocating most of the workload to the ACI or TokenLogic through Skyward which seem to be very well connected. Don’t be mistaken, we’re very much appreciative of the work that the ACI has put into the DAO but this proposal combined with recent comments on the proposal from @Flipside @fig can be perceived as the ACI trying to consolidate power and decision making.

Based on your dashboards @Llamaxyz, you have generated an estimate of $505.6K in protocol revenue. The question now is, can you quantify what is the estimated revenue that will be generated based upon completing the remaining actions?

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Hi, tbh i don’t understand why this proposals exists. Llama stated that their contract will end in a few months, they have some work right now, especially regarding the SM. And they stated they don’t want to extend this contract. Imo they should end their open tasks within the few months left and thats fine. No need to cancel anything now. Of course its up to the DAO.

Hi @Ezr3al - thank you for your initial support and understanding.

the work that is left open (primarily SM changes)

Not sure who you are speaking to, but this is untrue! SM changes are one small part of the work remaining. As you will see with the Github repo linked for the Aave Curator and the Strategic Asset Manager, these are useful and complex contracts being reviewed by BGD and internally at Llama.

Here is a sample of critical proposal payloads we have in progress (either being developed, reviewed internally, or reviewed by BGD) along with dashboards, reporting, and analytics:

  • Curator: a dedicated contract for managing the exchange of assets with MEV and price-impact protection, where possible. This will help swap assets, acquire LSTs, and transfer assets. This is a useful public good for Aave that can be used for many years to come.
  • Strategic Asset Manager: a dedicated contract for managing Aave DAO’s strategic assets, at launch it will manage the DAO’s veBAL holdings. StrategicAssetManager provides the functionality needed to maximize the DAO’s financial upside while minimizing the DAO governance’s overhead when managing the assets.
    • This is public infrastructure that can be used by any Aave contributor for many years to come.
  • Treasury management: proposal to rebalance the Aave treasury on mainnet.
  • Listing GMX: proposal to list GMX on Arbitrum v3.
  • Financial statements for July, August, and September. (e.g. June financial statements, May financial statements.)
  • Three additional analytics dashboards including a shortfall events analysis.
    • What’s required to build any of these dashboards is the data warehouse for Aave, which we have built and maintained.

The $2m annualized revenue impact number is outdated as it was from our 6 months update! We planned to share another update on our impact towards the end of our 12 month period but can do some estimates in the meantime. (To our knowledge, we are the only service provider that has shared this so would love to see others share this too so the comparison is fair.)

Ending a contract that the DAO has voted on and agreed to just 2 months before the end of the term seems to be petty and sets a bad precedent for Aave DAO. Since the items listed in our original proposal are being fulfilled, it makes sense to wait for two months.

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I’ve nothing to add here but to point your “Ending a contract tha the DAO has voted…”. My point of view is that if the DAO is able to grant a contract, the DAO is also able to vote to stop a contract even if it’s on progress. I see that you have added value to the Aave ecosystem and I really appreciate that, however the remaining money that you have right now on the stream is huge. To have a better POV I think that you should share your impact ASAP to have all the data before making my personal decision.

I also think that’s important to set up a precedent on the Aave DAO that overpaying for a services (not talking about Llama right now) is not something that should be accepted. The service providers are slowly but consistently draining the funds of the Aave DAO. Just to use you as an example (again, not attacking you) the ACI contract (for 6 months) can be paid with the amount remaining on that stream.

Disclaimer:

I am a contributor to ACI but this is my point of view and not related to ACI at all.

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The Aave Chan Initiative (ACI) has evaluated the remaining funds in the Llama stream, which amount to approximately $240k (~$188k in USDC and ~$50k worth of AAVE).

This is not about “only 2 months left”, but rather, “could the DAO allocate a quarter of a million dollars better than with Llama?” We firmly believe the answer is yes.

We simply consider Llama’s service to be unfit for the Aave DAO. The quality of services provided is considered insufficient.

Here’s a small curation of @Llamaxyz’s achievements:

  • Preferred to enjoy Christmas holidays instead of executing the much-needed CRV AIP, costing the DAO an additional ~$1m due to increased CRV valuation.
  • Charged for consulting to third-parties around Aave, for example teams looking for asset listings while being paid by the DAO 1.5m$. This is the reason a “disclaimer” section exists in the TEMP CHECK & ARFC framework to put an end to this practice.
  • As treasury managers, they failed to ensure the collector contract had sufficient aUSDC balance, resulting in multiple service providers being unpaid for weeks. This has damaged the DAO’s brand and reputation. (They’re the reason the ACI asked to be paid in aUSDT, as we rightfully didn’t trust Llama.)

Any of these examples should be considered as a reasonable motivation for immediate termination.

We respectfully disagree with this perspective. In the off-chain world, it’s common practice to replace service providers that overcharge and underdeliver. This is seen as a sign of healthy and good management.

Working for the Aave DAO is a privilege, not a right. Service providers are not government employees with guaranteed tenure.

We believe this ARFC sets a positive precedent for the DAO. It sends a clear message to all current and future service providers: Governance will assess and potentially reconsider agreements if they are deemed unfit. This ensures that the DAO’s resources are used efficiently and effectively.

To borrow a concept from the world of investing, “the best time to end the Llama stream was six months ago, the second best time is now.” It’s never too late to correct a course that isn’t serving the DAO’s best interests.

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Hi @0xkeyrock.eth,

TokenLogic has grown quickly over the last couple months. The below details the composition of the current team and gives some insights into our near/medium term team size.

1x @defijesus - Solidity developer (3 AIPs submitted, 4th AIP at review and 5th AIP being scoped)
2x @MatthewGraham & @Dydymoon - Defi Strategists (GHO Liquidity Strategy)
1x @agentmak - Frontend Developer (GHO Analytics Platform)
1x Backend Developer (TokenLogic’s Analytics Platform)

1x Accounting Provider - August onboarding - Currently going through contract legalities / due diligence.

This will enable <5min data, audited, financial statements - It is a fraction of the Messari proposal cost to sustain this. Similar to GHO Analytics, it will be open for the community to request analysis as it exists to serve Aave and its contributors.

1-2x Solidity Developers - A team delivers a better service. By having a team, it removes the single point of failure in our value stream, plus enables research and operations to co-exist efficiently which is a medium/long term value driver.

Our plan is to run in a self sufficient manner and we will use Skyward whenever there is workflow that we are not delivering fast enough. As part of the Aave team, we share the same common goal, which is creating success for Aave DAO.

TokenLogic has proposal power, we used it for the above AIP submissions. For context, it is the same contract Matthew shared with Llama, so now TokenLogic and Llama share this proposal power. We work with Llama, ACI and others just fine and we only intend to post here for correctness. The community can decide how to proceed, we will obviously abstain from any vote and from sharing an opinion.

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Responding factually to each of your points:

CRV AIP

AIP 146 was executed successfully, allowing the acquisition of 2.7m units of CRV, clearing the remaining excess debt on Aave V2. We wrote in detail the steps involved in the CRV proposal here; there were a number of steps and each was significantly complex. It is important that we allowed enough time for contracts to be developed, peer-reviewed internally, and peer-reviewed by BGD. Specific price movements are out of anyone’s control. It is not in Aave’s best interest to compromise on security for the sake of speed. The CRV Bad Debt Repayment Contract involved multiple moving parts, with external system dependencies and validations. The proposal payload involved the following:

  • Converted the existing USDC balance within the Aave v2 Collector contract to aUSDC so that it was not sitting idle in the treasury.
  • Approved the CRV Bad Debt Repayment Contract to spend up to the aUSDC Cap defined in the CRV Bad Debt Repayment Contract from the Aave v2 Collector contract. This was required to enable the CRV purchase.
  • Approved the CRV Bad Debt Repayment Contract to spend up to the CRV Cap defined in the CRV Bad Debt Repayment Contract from the Aave v2 Collector contract. This was required to pay back the CRV bad debt on behalf of Aave.

Charged for consulting to third-parties around Aave, for example teams looking for asset listings

During our Aave contract, we never received payments from external parties for asset listings. Before our contract, we helped Lido and Stader with the engineering work required for asset listing proposals and we were paid a small amount. This was encouraged by Aave Companies and others because asset listings require protocol expertise.

they failed to ensure the collector contract had sufficient aUSDC balance

Our payload to increase aUSDC on mainnet has been with BGD for review; it will be live as soon as it is approved. We have periodically updated Certora and other groups about this payload.

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This proposal seems like it is equally about TokenLogic as it is Llama.

While it is important to note there is close ties based on early team members, it’s important to focus on the core of this proposal – ending the payment of Llama and the services it’s provided.

After then, we may think about replacements for the scope.

It is my perspective that it should not automatically be assumed by TokenLogic – and that we should create opportunity for other qualified candidates who have been deferred otherwise.

A RFP of sorts.

Some examples:

Finance & Treasury Management: Steakhouse Financial
Safety Module & Incentives: Xenophon Labs
Analytics: …

Llama’s scope was massive.

While TokenLogic has been a good model of an active, properly incentivized platform, there is no need to make it Llama 2.0 and to inherit the exact same scope.

Instead, it’s an opportunity to distribute this responsibility to the most qualified teams

Disclaimer: this is my personal view, yada yada…

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Thanks for the information around the team and congrats on the growth!

We were not present or aware of the mentioned CRV AIP that had an impact of ~$1m and we’re not fully aware of the context around it.
Additionally, this is really a bad look if indeed @Llamaxyz was receiving payments for asset listings.

We’re leaning towards supporting this proposal but still quite undecided. Happy to be proven wrong based on new comments left.

If Llama is to be cancelled as a service provider we do believe that there is space for a new team or teams ideally to take the responsibility of the huge scope that Llama had. Maybe that was one of the contributing factors of under-perfomance and revenue contributed to the DAO?
We would like to put out the idea of multiple teams taking upon a specific vertical that they are solely focused on and if necessary collaborate with the other entities that pick up Llama’s scope.

After writing this, @fig just commented and we’re aligned with his thoughts.

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We first wanted to address two points that were brought up: CRV proposal and payment for asset listings.

CRV AIP

To reiterate what we noted above, the proposal was of high complexity and not something that Aave had done in the past; significant research and development went into the proposal. We’d encourage you to read our post on the timeline of the AIP development to learn more about all of the obstacles and complexities that needed to be addressed in order to ensure that the payload would function safely and as intended. Our goal is to move as efficiently as possible without compromising on security. Price movements are not in our or anyone’s control.

payments for asset listings

During our Aave contract, we never received payments from external parties for asset listings. Before our contract, we helped Lido and Stader with the engineering work required for asset listing proposals and we were paid a small amount. This was encouraged by Aave Companies and others because asset listings require protocol expertise.

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We appreciate Llamas’s involvement thus far in Aave, and while there were some hiccups we do think some of the initiatives driven by Llama were important for Aave’s growth (as they should’ve been under the approval of their service provider agreement).

Looking at the remainder of Llama’s work, we believe the expected benefit of these changes would be notably less than the remaining balance of their payment stream. This is further emphasised if ACI/TokenLogic are willing to finish the remaining work for no extra cost to the DAO.

At the end of the day, the Aave DAO has to look after their bottom line.

We will be supporting this proposal and thank Llama for their contributions to Aave.

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Llama Stream Response

Without commenting on the original contract or value remaining in the Llama service provider stream, I do think there are two points that are import to flag for a more meta discussion.

1. Service provider contract structure

In the Llama service provider proposals approved by the DAO in 2022, the community negotiated a 6-month cancellation option. This gave the community the flexibility to bow out if the initial proposal was not fulfilled, but left an amount of ambiguity on what those options would be.

When Llama provided their 6-month update there was no push-back and no discussion of a cancellation. Seeing as service provider proposals do not include the many pages of standard legalese of traditional B2B contract, there is no concept of termination for cause or for convenience defined and it is left open to interpretation.

AIPs as contracts a nascent legal field without sufficient case law, but this should be used as a case study to enhance the explicitness of expectations from service providers and provider contractual rights of cancellation periodically if they are not upheld. We should take this as an opportunity to formalize a DAO service provider ToS that is included in all funded AIPs which clarifies expectations and rights of each party to minimize ambiguity.

2. DAO issued RFPs vs. Service Provider Proposals

As is expected with large contracts at traditional institutions, the DAO should build competitive markets around its needs so that it gets the best service at the best price. As @fig mentioned, we should break down the existing llama contract to understand:

  1. What the DAO needs new partners to continue providing
  2. How much it should pay for those services
  3. What teams it should approached to “competitively bid” on that work

Some different work streams that the DAO could benefit from a diversity of providers are FP&A/Accounting, treasury management, protocol partnerships and TVL growth, among others.

For example, the community should hear pitches from teams like Llama, TokenLogic, Messari, Steakhouse, Gallifrey Labs, and others to handle the FP&A/Accounting aspects of the proposal.

TokenLogic has shown that they are a dedicated and beneficial service provider, and one that likely has a long-term place within the DAO, but we should not discount the benefits of a competitive bidding process to:

  1. Better understand the DAO’s needs (must haves, nice to haves, etc.)
  2. Compare different providers on an equal platform and ensure it is receiving the best proposal (not just cost, but quantity, too)
  3. Define expectations of the specific provider more clearly
  4. Bring in a diverse set of contributors and participants to continue decentralizing work done on behalf of the protocol

I would be happy (and eager) to work with @fig and other delegates to propose a more formal process for this for community review and approval.

—

Separately, there is an additional $500k of “KPI-based bonuses” that needs to be reviewed for payment in accordance with the AIP.

Alongside the conversation to terminate the engagement, the DAO should determine what amount of this bonus scheme should be paid, if any, with a detailed accounting of deliverables. @llamaxyz, can you provide a breakdown on where these stand?

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I understand the sentiment behind this proposal, and if passed it would certainly constitute an effective cost cutting method.

I would say though, if the Aave DAO does decide to cancel this service provider agreement it could disincentivise other potential service providers from engaging with the DAO (especially extremely professional ones imo). It could be hard for a growing team, that would be using the funding from a DAO to sustain their efforts and provide professional services, to pick Aave as their DAO of choice if they believe their contract may be cancelled with little notice after one of their employees leaves.

A more mediated step could be to renegotiate the cost of these final months so Llama can soft offboard from the DAO and isn’t handicapped too much (if Llama is open to it).

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The conversation is moving in a few different directions, so we wanted to address the point about our deliverables. Below are the deliverables we committed to in our initial proposal as @benhoneill suggested. We highlighted what is already completed (most work) and what will be finished in the next 8 weeks. We believe it is valuable to complete several items that we have spent months working on, including (but not limited to) the StrategicAssetManager and Curator contracts.

If the issue is that the amount streamed for the next two months is high, we could request a lower amount for the next two months as @Hazbobo suggested but we think it is vital to complete the work originally planned.

It is a strange precedent to set for a DAO that if the work is completed ahead of time, the contract can be cancelled earlier. Teams will be incentivized to wait till their last payment to complete outstanding work.

Treasury Management and Analytics

Task Actions
Strategic Partnerships

Work with other communities to determine if they are a good match for the Aave community and Aave’s vision/future intentions. Coordinate and deploy all on-chain proposals across necessary platforms.		 * 100k BAL acquisition via bonding curve
* Whitelist Balancer’s Liquidity Mining Claim
* Proposed and executed AIP-130 (Set LDO, stMATIC, MaticX and SD Emission_Admin for Polygon v3 Liquidity Pool).
* Maintained continuous dialog with external DAOs and organizations including Polygon Foundation, Stader Labs, Lido DAO, and Optimism to facilitate liquidity mining rewards and asset listings
* AIP-267: Treasury Management - Acquire B-80BAL-20WETH
Earning Yield

Deploy a portion of the DAO’s funds across diversified strategies of varying risk profiles to earn yield across many networks while maintaining sufficient stablecoin runway and optimizing risk exposure.		 * AIP-144: Ethereum v2 Collector Contract Consolidation
* AIP-261: Treasury Management - Acquire wstETH & rETH
* Published plans for the Curator and shared code with BGD for review. Once finished, the Curator will enable MEV- and price-impact-protected ability to swap assets, acquire yield-generating tokens, and transfer assets from the treasury.
* Strategic Asset Manager: dedicated contract for managing Aave DAO’s assets.
Grow Aave’s Revenue

Position Aave’s assets to bolster revenue growth. Utilize assets from the Reserve Factor to unlock and promote the growth of Aave markets and revenue.		 * Proposed and executed AIP-131 (Aave v2 ETH Interest Rate Curve Update)
* Supported CIAN as they built a MaticX / wMATIC strategy for Aave V3 (Polygon)
* AIP-150: Aave v3 Polygon wMATIC Interest Rate Upgrade
* AIP-151: BAL Interest Rate Curve Upgrades
* AIP-157: LDO - Reward Controller Access Request
* AIP-158: Ethereum v2 - wETH Interest Rate Curve Upgrade
* AIP-163: Add wstETH to Arbitrum Aave v3
* AIP-167: MaticX Risk Parameter & Interest Rate Upgrade
* AIP-168: Add CRV to Ethereum v3
* AIP-172: SupplyCap Increase Polygon v3
* AIP-175: CRV Interest Rate Curve Upgrade
* AIP-182: MaticX Supply Cap Increase Polygon v3
* AIP-183: OP Emission_Admin for Optimism v3 Liquidity Pool
* AIP-197: Add UNI, MKR, SNX & BAL to Ethereum V3
* AIP-199: Increase wMATIC Supply Cap and BAL Borrow Cap
* AIP-201: Add LDO to Ethereum Aave v3
* AIP-209: Increase SupplyCap stMATIC Polygon & wETH Arbitrum
* AIP-210: Add wstETH to Polygon Aave V3
* AIP-211: BAL Interest Rate Upgrade
* AIP-225: LST Supply Cap Increase Polygon & Arbitrum
* AIP-229: MaticX Supply Cap Increase Polygon v3
* AIP-231: wMATIC Supply & Borrow Cap Increase Polygon v3
* AIP-241: Polygon Supply Cap Update
* AIP-242: Add rETH to Arbitrum v3
* AIP-243: Add LUSD to Arbitrum Aave V3
* AIP-250: Polygon v2 - Parameter Update
* AIP-257: Optimism - Create ETH eMode Category
Hedging

Explore and implement ways to provide downside protection to the Ecosystem Reserve.		 Aave’s token price and crypto markets generally have been down significantly. It does not make sense to hedge during a bear market as much as it does during a bull market.
Claim Revenue to Treasury for Aave V3

Make periodic calls to claim Aave V3 revenue to Aave’s treasury.		 Set up off-chain infrastructure to automatically and dynamically claim all revenue to the treasury for Aave V3 on Polygon, Optimism, Arbitrum and Avalanche on a weekly basis (i.e every Thursday).

Some example transactions across the different networks:
1. Polygon
2. Optimism
3. Arbitrum
4. Avalanche
Improve Capital Efficiency of the Safety Module (SM)

Create various optimizations for the SM to ensure that it functions with Aave’s increased TVL.		 * [Discussion] Safety Module
* [TEMP CHECK] SM upgrades
* Snapshots for SM upgrades: 1, 2, 3, 4, 5
Safety Module Performance

Provide detailed analysis of the SM’s historical and current performance relative to TVL, market conditions, and market volatility.		 * Published Safety Module dashboard at community.llama.xyz/aave/safety-module
Shortfall Event Analysis

Model the effect of a shortfall event on the SM’s backstop and AAVE token price.		 * In progress, with dashboard expected soon
Runway Analysis

Provide analysis that will shape investment, amongst other, decisions across the DAO.		 * November ‘22 Aave runway analysis
* Created a live runway dashboard at community.llama.xyz/aave/runway
Develop a Data Warehouse for Aave

Develop a live, customized, and transparent financial reporting backend solution for Aave.		 Developed a data warehouse that combines and transforms on-chain data from numerous networks with off-chain data sources to provide a comprehensive base layer of Aave blockchain data that can be used to build real-time analytics dashboards.

Used this warehouse to power community.llama.xyz/aave
Accounting Reports

Publish financial reporting statements enabled by the data warehouse.		 * October 2022 financials
* November 2022 financials
* Q4 2022 financials
* January 2023 financials
* February 2023 financials
* Q1 2023 financials
* April 2023 financials
* May 2023 financials
* June 2023 financials
Investment Performance Reporting

Provide visibility into each investment strategy, its performance, and associated risks.		 * In progress, with dashboard expected soon
Risk Modeling for DAO Investments

Model various risk scenarios to ensure the DAO has exit strategies during periods of market turbulence.		 * In progress, with dashboard expected soon

Growth

Task Actions
ARC Market Liquidity Mining Module

Upgrade the Aave ARC market to include a liquidity mining module.		 No longer relevant as Aave ARC has become insignificant over the past year; it has <$100k in TVL currently.
New Collateral Types

Work with Balancer to bring a new type of productive collateral to Aave markets and subsequently roll it out across the various Aave V3 deployments.		 Conducted research & published ARC for ERC-4626 collateral-type, followed up with a Snapshot vote. Aave Companies and BGD worked together to implement the collateral type proposal.
DeFi Integrations

Bolster the adoption of Aave’s tokens across DeFi by supporting initiatives that build on top of Aave markets or integrations that create TVL for Aave markets.		 * Created proposal on Sturdy Finance to onboard the new boosted Aave V3 BB-A-USD as collateral.
* Llama has proposed the following gauges on Balancer, among others:
* wstETH/bb-a-wETH (Ethereum, Arbitrum, Polygon)
* cbETH/bb-a-wETH (Ethereum)
* stMATIC/bb-a-wMATIC (Polygon)
* MaticX/bb-a-wMATIC (Polygon)
* rETH/bb-a-wETH (Arbitrum)
Metagovernance

Enable AAVE and stkAAVE holders to participate in metagovernance by voting on proposals within other communities in which Aave DAO holds tokens.		 * Shared plans for StrategicAssetManager and shared code with BGD for review, which will enable Aave DAO to utilize veBAL and other strategic holdings.
Asset Listing Risk Assessments

Support asset listings by providing a qualitative risk analysis report on the forum that details the initial risk parameters.

Adopt any risk parameters suggested by Gauntlet, provided borrowing is enabled at launch		 * Qualitative risk assessment for BADGER
* Proposal to list rETH, including qualitative risk assessment
Other Tasks * Ethereum v2 Reserve Factor - aFEI Holding Update
* Executed multiple swaps of aFEI to aDAI in the Aave V2 Collector through the swapper contract that was set up as part of AIP-105
* Co-authored an ARC with Gauntlet to propose a path forward for covering $1.6m in excess debt from CRV markets.
* Worked with Chaos Labs to propose AIP-125, which allows users to deposit assets across the majority of reserves rather than freezing pools as outlined in AIP-121.
* Published ARC along with Gauntlet, Chaos Labs, 3SE Holdings, and @ItsFreeRealEstate to halt listings on Aave V1 and Aave V2 markets.
* AIP-145: Renew Aave Grants DAO.
* AIP-146: Repay Excess CRV Debt on Ethereum v2.
* Created an Aave Grants dashboard
* Extended Safety Module coverage to Polygon V3
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About stream cancellation

Considering the tremendous effort that has been and is being done to set Aave as an example of a decentralized DAO, but still optimal, for me it is simply unacceptable to have a situation like the aforementioned. We can’t have an entity engaged for treasury management and accounting reporting, and be in a scenario in which service providers (even Llama itself) can’t claim the vested payments on their engagements.

This is not a matter of having now a payload prepared to solve the problem, or even a matter of really negative consequences (as contributors hopefully will accept the situation): the issue is that having a pretty clear vision of outflows for like 1 year, nothing has been done until a service provider noticed the inability to claim.

I don’t even think budget is the main consideration here: the situation is simply ridiculous and not up to expected standards. Most probably, in non-decentralized entities, this would be equivalent to gross negligence and immediate closure of engagement.

So I think a vote on the matter for the community to express itself is acceptable.



High-level problem

Now, the points raised by @fig are actually the root of the problem here, even if I differ slightly on the view.

In my opinion, there should be way more separation of concerns in terms of entities contributing. At least clearly delimited by expertise, and not trying to touch development, risk, treasury, growth, marketing, etc.


To be clear, I don’t think this is a problem exclusive to Llama and its scope (even if it was, and I was really vocal about it back in the days). But I’m really aware due to my involvement providing services with BGD that the approach of having a lot of parties trying to tackle multiple “fields” (and budgeting them) is 1) not optimal operationally 2) creates huge darkness and lack of transparency to the community

  • If an entity does development → design and develop systems to Aave, and support non-technical entities

  • If an entity provides security procedures → support development and risk on security considerations.

  • If an entity does risk advising → analyze liquidity conditions and Aave pools and propose improvements to be applied (or implemented by development).

  • If an entity does treasury-related tasks → do proper tracking of finances, propose investment strategies, and be sure that the DAO is in a good treasury position.

  • If an entity does support external parties → support

…and so on.


I also think the DAO should be “optimistic” enough to not over bureaucratize itself. Just segmenting the fields of contributions will be definitely healthy.

For example, going back to treasury management, the needs to Aave are actually pretty simple:

  • “Accounting” reports

  • Keep funds available for due payments, pro-actively.

  • Invest in strategies not creating big overhead for the DAO, even if producing less yield.

Everything else is either 1) superfluous or 2) to be done ad-hoc.




This really deserves a clarification, because it is really misleading and factually incorrect.

First, BGD is/was not involved at all in “asking” for anything to potential contributors, including Llama. The relation BGD has with listings is that as part of our scope, we support any team seeking it on the technical parts, like writing the proposal payload or explaining how is the procedure of submitting a governance proposal. Over time, we have also supported contributors Llama and others on precisely these technical aspects, even when they were done on behalf of other teams because we are just neutral and try to help everybody.


Now, for full transparency, Shreyas (founder of Llama) asked me personally for feedback back in the days on the proposal for engagement with Aave, which I gladly gave as a community member.

Something I commented (basically more or less same as publicly HERE) is that as an option, the cost of supporting listings could not be bear by the Aave DAO (meaning not including it at all on the scope of Aave <> Llama), with Llama budgeting it to external teams contacting if really ad-hoc support. Again, as an option on a feedback request and in this forum; it is not up to me to decide what Llama proposes or not.

Obviously, I never suggested that BOTH the Aave DAO and third parties should cover services cost. And even more, once the listing cost was finally included in the Aave <> Llama budget, and knowing some extra cost was still being derived to third parties, I gave strong feedback to Llama to do something about it, as I believe it hurts the Aave DAO relation with partners.

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Re. USDC on mainnet: we have a payload that can go live once it is reviewed by BGD. We informed Certora, Gauntlet, and Chaos of the payload two weeks ago and they were appreciative of the heads up.

Re. service providers in the future taking on more limited scope and tasks: we are supportive of that for any future DAO contributors.

Re. receiving payments for asset listings: we agree with you here! Aave DAO did not bear any cost of proposal payloads; we only included risk assessments in the scope as noted. During our Aave contract, we never received payments from external parties for asset listings. Before our contract, we helped Lido and Stader with the engineering work required for asset listing proposals and we were paid a small amount. This was encouraged by Aave Companies and others because asset listings require protocol expertise.

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