# \[ARFC\] Ethereum v2 Reserve Factor Adjustment **URL:** \ **Category:** Governance\ **Created:** [February 27, 2024, 9:51pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764 "2024-02-27T21:51:11Z")\ **Posts on this page:** 19\ **Page:** 1
**Author:** ![karpatkey\_TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/karpatkey_tokenlogic/32/4737_2.png) [@karpatkey\_TokenLogic](https://governance.aave.com/u/karpatkey_TokenLogic)\ **Post date:** [February 27, 2024, 9:51pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/1 "2024-02-27T21:51:12Z")
* * * title: [ARFC] Ethereum v2 Reserve Factor Adjustment author: @karpatkey_TokenLogic @ChaosLabs created: 2024-02-27 * * * # Summary This publication proposes periodically increasing the Aave v2 Ethereum Reserve Factor (RF) to encourage users to migrate to Aave v3. # Motivation With Aave v3 now crossing the $8 Billion TVL threshold and $3 Billion remaining in Aave v2, this publication seeks to encourage users to migrate from v2 to v3 by increasing the RF. With all other variables held constant, increasing the RF over time in isolation will result in a reducing deposit rate. Users are encourage to migrate to v3 in search of higher yield. With market conditions permitting, we propose initiating a periodic 5.00% RF increase across all assets every 14 days as mentioned [here](https://governance.aave.com/t/arfc-chaos-labs-incremental-reserve-factor-updates-aave-v2-ethereum/13766) up to a threshold of 99.99%. During each increase cycle, we will monitor how users respond and, if any potential risks are identified, the next RF increase will be delayed until it is safe to implement. Do note increasing the RF parameter does not directly affect users’ health factor, and this method has already been [implemented on Polygon v2](https://governance.aave.com/t/temp-check-polygon-v2-to-v3-liquidity-migration/12350) for some time. # Specification The below shows the current and proposed RF for each reserve. | Asset | Current RF | Recommended RF | | --- | --- | --- | | 1INCH | 99.00% | 99.99% | | AMPL | 99.90% | 99.99% | | BUSD | 99.90% | 99.99% | | BAL | 99.00% | 99.99% | | BAT | 99.00% | 99.99% | | CRV | 99.00% | 99.99% | | CVX | 99.00% | 99.99% | | DAI | 25.00% | 30.00% | | DPI | 99.00% | 99.99% | | ENS | 99.00% | 99.99% | | ENJ | 99.00% | 99.99% | | FEI | 99.00% | 99.99% | | FRAX | 30.00% | 35.00% | | GUSD | 20.00% | 25.00% | | KNC | 99.00% | 99.99% | | LINK | 30.00% | 35.00% | | LUSD | 25.00% | 30.00% | | MANA | 99.00% | 99.99% | | MKR | 99.00% | 99.99% | | RAI | 99.00% | 99.99% | | REN | 99.00% | 99.99% | | renFIL | 35.00% | 99.99% | | SNX | 99.00% | 99.99% | | sUSD | 30.00% | 35.00% | | SUSHI | 99.00% | 99.99% | | TUSD | 99.00% | 99.99% | | UNI | 99.00% | 99.99% | | USDC | 25.00% | 30.00% | | USDP | 20.00% | 25.00% | | USDT | 25.00% | 30.00% | | UST | 99.00% | 99.99% | | wBTC | 30.00% | 35.00% | | wETH | 25.00% | 30.00% | | YFI | 99.00% | 99.99% | | ZRX | 99.00% | 99.99% | Upon implementing this proposal, a subsequent AIP will be submitted every 2 weeks that increases the RF by 5.00% up to a maximum of 99.99%, subject to market conditions. # Disclosure TokenLogic, karpatkey and Chaos Labs receive no payment for this proposal. TokenLogic and karpatkey are both delegates within the Aave community. # Next Steps 1. Gather feedback from the community. 2. If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage. 3. If Snapshot outcome is YAE, escalate this proposal to AIP stage 4. Subsequent AIP submission are expected to follow every 14 days thereafter # Copyright Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/). ---
**Author:** ![midapple](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/midapple/32/5221_2.png) [@midapple](https://governance.aave.com/u/midapple)\ **Post date:** [February 28, 2024, 4:40am UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/2 "2024-02-28T04:40:35Z")
please explain how increasing reserve factor helps migrate users. thank you. ---
**Author:** ![karpatkey\_TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/karpatkey_tokenlogic/32/4737_2.png) [@karpatkey\_TokenLogic](https://governance.aave.com/u/karpatkey_TokenLogic)\ **Post date:** [March 4, 2024, 8:17pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/3 "2024-03-04T20:17:13Z")
A Snapshot vote has been created, [here](https://snapshot.org/#/aave.eth/proposal/0x26a03c08359c340f63b78b0c3e96d37aa0adeda65814643b0886d4719048ea7e). **Start date** Mar 5, 2024, 8:09 PM **End date** Mar 8, 2024, 8:09 PM ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [March 20, 2024, 12:45pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/4 "2024-03-20T12:45:11Z")
Hey, The next update will bring the reserve factors to: | Asset | Previous Reserve Factor | New Reserve Factor | | --- | --- | --- | | DAI | 30.00% | 35.00% | | FRAX | 35.00% | 40.00% | | GUSD | 25.00% | 30.00% | | LINK | 35.00% | 40.00% | | LUSD | 30.00% | 35.00% | | sUSD | 35.00% | 40.00% | | USDC | 30.00% | 35.00% | | USDP | 25.00% | 30.00% | | USDT | 30.00% | 35.00% | | WBTC | 35.00% | 40.00% | | WETH | 30.00% | 35.00% | We will be submitting this AIP for voting on March 25th. ---
**Author:** ![Frida](https://avatars.discourse-cdn.com/v4/letter/f/57b2e6/32.png) [@Frida](https://governance.aave.com/u/Frida)\ **Post date:** [March 21, 2024, 12:22am UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/5 "2024-03-21T00:22:09Z")
Following up on this: is it because lenders start getting lower yield and are incentivised to migrate? ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [April 1, 2024, 2:35pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/6 "2024-04-01T14:35:53Z")
Hey, The next update will bring the reserve factors to: | Asset | Previous Reserve Factor | New Reserve Factor | | --- | --- | --- | | DAI | 35.00% | 40.00% | | FRAX | 40.00% | 45.00% | | GUSD | 30.00% | 35.00% | | LINK | 40.00% | 45.00% | | LUSD | 35.00% | 40.00% | | sUSD | 40.00% | 45.00% | | USDC | 35.00% | 40.00% | | USDP | 30.00% | 35.00% | | USDT | 35.00% | 40.00% | | WBTC | 40.00% | 45.00% | | WETH | 35.00% | 40.00% | We will be submitting this AIP for voting on April 8th. ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [April 11, 2024, 3:10pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/7 "2024-04-11T15:10:17Z")
gm, The next update will bring the reserve factors to: | Asset | Previous Reserve Factor | New Reserve Factor | | --- | --- | --- | | DAI | 40.00% | 45.00% | | FRAX | 45.00% | 50.00% | | GUSD | 35.00% | 40.00% | | LINK | 45.00% | 50.00% | | LUSD | 40.00% | 45.00% | | sUSD | 45.00% | 50.00% | | USDC | 40.00% | 45.00% | | USDP | 35.00% | 40.00% | | USDT | 40.00% | 45.00% | | WBTC | 45.00% | 50.00% | | WETH | 40.00% | 45.00% | We will be submitting this AIP for voting on April 22nd. ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [May 6, 2024, 4:00pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/8 "2024-05-06T16:00:35Z")
gm, The next update will bring the reserve factors to: | Asset | Previous Reserve Factor | New Reserve Factor | | --- | --- | --- | | DAI | 45.00% | 50.00% | | FRAX | 50.00% | 55.00% | | GUSD | 40.00% | 45.00% | | LINK | 50.00% | 55.00% | | LUSD | 45.00% | 50.00% | | sUSD | 50.00% | 55.00% | | USDC | 45.00% | 50.00% | | USDP | 40.00% | 45.00% | | USDT | 45.00% | 50.00% | | WBTC | 50.00% | 55.00% | | WETH | 45.00% | 50.00% | We will be submitting this AIP for voting on May 7th. ---
**Author:** ![ghostlyenergy](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/ghostlyenergy/32/5869_2.png) [@ghostlyenergy](https://governance.aave.com/u/ghostlyenergy)\ **Post date:** [May 6, 2024, 6:29pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/9 "2024-05-06T18:29:24Z")
@karpatkey_TokenLogic It would be great to see an update / analysis on the following: 1. The impact increasing RF has had on on these assets’ supply and borrow positions 2. How many of these positions are flowing to the V3 market vs. other lending protocols I know the goal here is: > [@karpatkey\_TokenLogic](#): > > to encourage users to migrate to Aave v3. and it would be prudent to check our assumptions here. ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [May 24, 2024, 5:04am UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/10 "2024-05-24T05:04:54Z")
gm, The next update will bring the reserve factors to: | Asset | Previous Reserve Factor | New Reserve Factor | | --- | --- | --- | | DAI | 50.00% | 55.00% | | FRAX | 95.00% | 99.99% | | GUSD | 95.00% | 99.99% | | LINK | 55.00% | 60.00% | | LUSD | 95.00% | 99.99% | | sUSD | 95.00% | 99.99% | | USDC | 50.00% | 55.00% | | USDP | 95.00% | 99.99% | | USDT | 50.00% | 55.00% | | WBTC | 55.00% | 60.00% | | WETH | 50.00% | 55.00% | We will be submitting this AIP for voting on May 24th. ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [June 23, 2024, 5:05am UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/11 "2024-06-23T05:05:09Z")
This topic was automatically closed 30 days after the last reply. New replies are no longer allowed. ---
**Author:** ![ACI](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/aci/32/4780_2.png) [@ACI](https://governance.aave.com/u/ACI)\ **Post date:** [June 24, 2024, 3:30pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/12 "2024-06-24T15:30:27Z")
---
**Author:** ![Luigy](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/luigy/32/6253_2.png) [@Luigy](https://governance.aave.com/u/Luigy)\ **Post date:** [June 24, 2024, 3:50pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/13 "2024-06-24T15:50:51Z")
The next update will bring the reserve factors to: | Market | Asset | Current RF | New RF | | --- | --- | --- | --- | | Ethereum V2 | DAI | 55% | 60% | | Ethereum V2 | LINK | 60% | 65% | | Ethereum V2 | USDC | 55% | 60% | | Ethereum V2 | USDT | 55% | 60% | | Ethereum V2 | WBTC | 60% | 65% | | Ethereum V2 | WETH | 55% | 60% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [July 12, 2024, 3:28pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/14 "2024-07-12T15:28:30Z")
The next update will bring the reserve factors to: | Asset | Market | Current RF | Proposed RF | | --- | --- | --- | --- | | DAI | Ethereum v2 | 60.00% | 65.00% | | LINK | Ethereum v2 | 65.00% | 70.00% | | USDC | Ethereum v2 | 60.00% | 65.00% | | USDT | Ethereum v2 | 60.00% | 65.00% | | wBTC | Ethereum v2 | 65.00% | 70.00% | | wETH | Ethereum v2 | 60.00% | 65.00% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [July 26, 2024, 12:04am UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/15 "2024-07-26T00:04:05Z")
The next update (early August) will bring the reserve factors to: | Asset | Market | Current RF | Proposed RF | | --- | --- | --- | --- | | DAI | Ethereum v2 | 65.00% | 70.00% | | LINK | Ethereum v2 | 70.00% | 75.00% | | USDC | Ethereum v2 | 65.00% | 70.00% | | USDT | Ethereum v2 | 65.00% | 70.00% | | wBTC | Ethereum v2 | 70.00% | 75.00% | | wETH | Ethereum v2 | 65.00% | 70.00% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [August 21, 2024, 3:24pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/16 "2024-08-21T15:24:45Z")
The next update (late August) will bring the reserve factors to: | Asset | Market | Current RF | Proposed RF | | --- | --- | --- | --- | | DAI | Ethereum v2 | 70.00% | 75.00% | | LINK | Ethereum v2 | 75.00% | 80.00% | | USDC | Ethereum v2 | 70.00% | 75.00% | | USDT | Ethereum v2 | 70.00% | 75.00% | | wBTC | Ethereum v2 | 75.00% | 80.00% | | wETH | Ethereum v2 | 70.00% | 75.00% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [September 16, 2024, 3:42pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/17 "2024-09-16T15:42:37Z")
The next update (late September) will bring the reserve factors to: | Asset | Market | Current RF | Proposed RF | | --- | --- | --- | --- | | DAI | Ethereum v2 | 75.00% | 80.00% | | LINK | Ethereum v2 | 80.00% | 85.00% | | USDC | Ethereum v2 | 75.00% | 80.00% | | USDT | Ethereum v2 | 75.00% | 80.00% | | wBTC | Ethereum v2 | 80.00% | 85.00% | | wETH | Ethereum v2 | 75.00% | 80.00% | ---
**Author:** ![clox](https://avatars.discourse-cdn.com/v4/letter/c/3be4f8/32.png) [@clox](https://governance.aave.com/u/clox)\ **Post date:** [October 8, 2024, 1:17pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/18 "2024-10-08T13:17:55Z")
The next update (Mid October) will bring the reserve factors to: | Asset | Market | Current RF | Proposed RF | | --- | --- | --- | --- | | DAI | Ethereum v2 | 80.00% | 85.00% | | LINK | Ethereum v2 | 85.00% | 90.00% | | USDC | Ethereum v2 | 80.00% | 85.00% | | USDT | Ethereum v2 | 80.00% | 85.00% | | wBTC | Ethereum v2 | 85.00% | 90.00% | | wETH | Ethereum v2 | 80.00% | 85.00% | ---
**Author:** ![clox](https://avatars.discourse-cdn.com/v4/letter/c/3be4f8/32.png) [@clox](https://governance.aave.com/u/clox)\ **Post date:** [October 23, 2024, 8:36pm UTC](https://governance.aave.com/t/arfc-ethereum-v2-reserve-factor-adjustment/16764/19 "2024-10-23T20:36:59Z")
The next update (Late October) will bring the reserve factors to: | Asset | Market | Current RF | Proposed RF | | --- | --- | --- | --- | | DAI | Ethereum v2 | 85.00% | 90.00% | | LINK | Ethereum v2 | 90.00% | 95.00% | | USDC | Ethereum v2 | 85.00% | 90.00% | | USDT | Ethereum v2 | 85.00% | 90.00% | | wBTC | Ethereum v2 | 90.00% | 95.00% | | wETH | Ethereum v2 | 85.00% | 90.00% |