[ARFC] KNC onboarding on AaveV3 Ethereum market

title: [ARFC] KNC onboarding on AaveV3 Ethereum market

author: Alice Rozengarden @Alice - Aave-chan initiative

date: 2023-09-27


This ARFC is proposing to add the KNC token from Kyberswap to the AaveV3 Ethereum market in isolation mode.


KyberSwap is a multi-chain DEX aggregator + concentrated liquidity platform, that aims to offer superior rates for traders and capital-efficient returns for liquidity providers.

As one of the oldest and most popular DEX aggregators with an average of 500K web visitors per month. KyberSwap has already been deployed on 14 chains, including Ethereum, Polygon, Arbitrum, Optimism, Avalanche, and Base. Total trading volume has crossed $21B+ and the current total value locked (TVL) on all chains is $60M+.

KNC is Kyber’s utility and governance token and an important part of KyberSwap operations. KNC holders can stake KNC to vote on proposals to improve KyberSwap. In return, KNC voters receive rewards from fees collected through trading on KyberSwap and other ecosystem collaborations. As more trades are executed and new protocols are added, more rewards are generated.

Adding support for KNC on Ethereum V3 in isolated mode would allow KNC holders to borrow stablecoins by leveraging their KNC position, attracting new KNC deposits, which would add a new revenue stream for Aave while limiting the exposure.


We propose the following parameters according to Gauntlet and ChaosLabs’s recommendations:

Parameter Value
Isolation Mode Yes
Borrowable Yes
Collateral Enabled Yes
Supply Cap (KNC) 1.200.000
Borrow Cap (KNC) 650,000
Debt Ceiling 1M$
LTV 35.00%
LT 40.00%
Liquidation Bonus 10.00%
Liquidation protocol Fee 10.00%
Variable Base 0.00%
Variable Slope1 9.00%
Variable Slope2 300.00%
Uoptimal 45.00%
Reserve Factor 20.00%
Stable Borrowing Disabled
Stable Slope1 13.00%
Stable Slope2 300.00%
Base Stable Rate Offset 3.00%
Stable Rate Excess Offset 5.00%
Optimal Stable To Total Debt Ratio 20.00%
Flahloanable Yes
Siloed Borrowing No
Borrowed in Isolation No


This proposal is powered by Skyward.

The author isn’t compensated by KyberSwap for this ARFC.

Next step:

The following steps are as follow:

  • gather community feedback and @Gauntlet recommendations on this ARFC.
  • Publish a snapshot of the risk providers recommendations.
  • If said snapshot is successful, escalate to an AIP.


Copyright and related rights waived via CC0.


Thanks @Alice and the ACI for putting forward this proposal. As mentioned in our KNC recommendations here, we are supportive of the proposed parameters.

1 Like

This [ARCF] has been escalated to the snapshot stage.


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