[ARFC] Extend Ahab Funding

Governance
1

title: [ARFC] Extend Ahab Funding
author: @TokenLogic
created: 2025-10-06

Summary

In collaboration with Aave’s growth teams, this publication proposes a flexible funding arrangement to support incentive commitments made by Service Providers when securing strategic partnerships.

Motivation

In recent times, the DAO service providers have negotiated many beneficial opportunities reinforcing Aave Protocol’s dominant market position across the broader industry. These opportunities align with the Road to 80% north star and strategically position Aave for sustained medium term growth. Partnerships with Kraken, Binance, Plasma, X Layer and others each require contribution from the Aave DAO in varying capacity during the bootstrapping phase.

To reduce governance overhead associated with individual funding requests, this publication establishes a flexible funding mechanism to support bootstrapping efforts and strengthen Aave Protocol’s position across key ecosystems. With Plasma, Ink, X Layer and other deployments either live, or soon to be deployed, this publication aims to make available near term funding while a wider-reaching proposal is being prepared. Importantly, this publication serves to address immediate operational priorities.

With a preference to retain ETH and to distribute rewards in GHO where practical, or in assets aligned with each bootstrapped market, we propose adjusting Ahab’s budget to better support near-term Aave Protocol bootstrapping efforts. This adjustment enhances flexibility in how the DAO’s capital is utilized. For illustrative purposes only, borrow capital at net zero or near zero cost (GHO), distribute incentives to users whilst continuing to accrue yield on existing stablecoins (eg: USDT0 on Plasma) and then use future revenue (eg: GHO on Core) to repay settle liabilities. Doing this allows the DAO to benefit from earning yield on existing assets whilst arbitraging stablecoin funding rates.

Whilst maintaining sufficient collateral, the DAO benefits from enhanced cashflow management flexibility. Through the distribution of GHO, GHO is introduced to a new user base, with future GHO revenue expected to cover liabilities. If needed, other Allowances, such as those mentioned in the specification section, can be utilised to manage the Aave position and, to some extent, support GHO’s peg.

With conservative health factor(s) and having sufficient Allowances in place, the Aave Finance Committee (AFC) has the ability to provide support for the peg by optimising when swaps are performed.

Specification

This proposal upon AIP execution implements the following:

Aave Helper Asset Budget (Ahab)

  • Asset: aEthWETH 0x4d5F47FA6A74757f35C14fD3a6Ef8E3C9BC514E8
  • Amount: 6,000
  • Spender: Ahab 0xAA2461f0f0A3dE5fEAF3273eAe16DEF861cf594e
  • Method: approve() aEthWETH on the Aave Collector contract to the Ahab address

For USDT0, Plasma:

  • Asset: aPlaUSDT0 0x5D72a9d9A9510Cd8cBdBA12aC62593A58930a948
  • Amount: 3M
  • Spender: Ahab 0xAA2461f0f0A3dE5fEAF3273eAe16DEF861cf594e
  • Method: approve() aPlaUSDT0 on the Aave Collector contract to the Ahab address.

For USDe, Plasma:

  • Asset: aPlaUSDe 0x7519403E12111ff6b710877Fcd821D0c12CAF43A
  • Amount: 2M
  • Spender: Ahab 0xAA2461f0f0A3dE5fEAF3273eAe16DEF861cf594e
  • Method: approve() aPlaUSDe on the Aave Collector contract to the Ahab address.

For GHO, Ethereum:

  • Asset: aEthGHO 0x00907f9921424583e7ffBfEdf84F92B7B2Be4977
  • Amount: 10M
  • Spender: Ahab 0xAA2461f0f0A3dE5fEAF3273eAe16DEF861cf594e
  • Method: approve() aEthGHO on the Aave Collector contract to the Ahab address.

This proposal upon passing ARFC Snapshot vote, it grants the AFC, led by TokenLogic, the ability to perform the following on the Ahab SAFE:

  • Actively manage collateral and debt positions on Aave Protocol
  • Create incentives campaigns on Aave Protocol that utilise @ACI to distribute rewards to users
  • Balance incentive campaign expenditure and DAO cashflow, to facilitate supporting strategic opportunities.

The DAO entrusts TokenLogic to manage the respective budget in collaboration with respective Growth teams and AFC members, and in doing so balance supporting strategic opportunities and cashflow commitments.

Disclosure

TokenLogic does not receive any payment for this proposal.

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 the AIP stage.

Copyright

Copyright and related rights waived via CC0.

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In alignment with the objectives outlined in this proposal, we intend to temporarily reduce the USDT0 reserve factor for an initial three-month period. This measure is designed to foster accelerated growth of the USDT0 market on Plasma.

This decision has been jointly agreed upon with both Plasma and Binance, given the expected substantial inflows resulting from the triparty partnership. We believe this adjustment, combined with the incentive framework proposed herein, will firmly position Plasma as the leading venue for USDT0 lending activity.

Moreover, with syrupUSDT and Ethena PTs scheduled for listing in the coming days, the demand for USDT0 is projected to increase materially. Implementing this reserve factor reduction will create the most favorable environment to capture and sustain this growth momentum.

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Following the successful Snapshot vote for the [ARFC] Extend Ahab Funding proposal, we plan to proceed with the necessary operational adjustments to maintain seamless continuity of AAVE buybacks and optimize treasury management across DAO SAFEs.

As an immediate next step, we intend to transfer the stablecoin assets currently held in the Ahab SAFE to the AFC SAFE. The specific balances include:

This transfer will allow the AFC to continue executing AAVE buybacks without any downtime, ensuring uninterrupted progress in line with the DAO’s broader capital efficiency and value accrual objectives.

In addition, we propose to create an allowance of 5M aEthUSD (mix of USDS, USDC and USDT), corresponding to roughly four weeks of buyback activity. This buffer will replace the liquidity previously managed through Ahab and provide sufficient flexibility to sustain consistent buyback operations over the near term.

Finally, we recommend adding AAVE to the Aave Swap Steward, enabling the DAO to utilize AAVE directly for buyback purposes. Integrating AAVE into the Swap Steward will streamline execution, simplify operational workflows, and bring all buyback-related activities under a unified and transparent execution framework.

Together, these measures ensure operational continuity, enhance treasury efficiency, and further align the buyback framework with the DAO’s strategic priorities following the approval of this ARFC.

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