[ARFC] Merit - A New Aave-Alignment User Reward System

Governance
88

[ARFC-Addendum] Update GHO Dynamics and StkGHO Fast Exit Mechanism

Author: ACI (Aave Chan Initiative)

Date: 2024-08-05

Simple Summary

We propose to whitelist dedicated service providers GHO to manage “FastPass” and remove the cooldown diluter for the Safety Module.

Motivation

Following the previously proposed “FastPass” concept, we’ve refined our approach to enhance GHO ecosystem efficiency. As GHO has demonstrated stability, maturity, and resilience during its first volatility black swan event, it’s time to optimize its staking liquidity. This proposal aims to enhance the efficiency of the StkGHO cooldown by creating a “fast exit mechanism”.

This Simple “FastPass” implementation, whitelist dedicated service providers ( @karpatkey_TokenLogic & @ACI) to implement up to 2.5M “buy walls” via Cowswap limit orders at 0.99 GHO per stkGHO to allow StkGHO holders to leave the GHO safety module with a small fee.

FastPass mainteners GHO will be considered as StkGHO in the context of merit and eligible for rewards, to reduce their opportunity costs and incentives their service for the GHO stakers.

As limit orders are filled by the market the service providers are responsible to call cooldown and replenish their fastPass liquidity overtime.

Specification

  1. Whitelist Service Providers for StkGHO Buy Walls:
  • Implement a whitelist service provider addresses mobilized to create and maintain StkGHO buy orders.
  • Allow whitelisted service providers to receive StkGHO yield on the GHO they mobilize to place StkGHO buy walls at 0.99 StkGHO.
  • This approach replaces the previously proposed “FastPass” mechanism, offering a more targeted solution to improve liquidity and fast exits for StkGHO without the need for complex technical implementation.
  1. Remove the Cooldown Diluter:
  • Given GHO’s demonstrated stability and successful navigation of its first volatility black swan event, the current harsh policy towards users leaving the Safety Module is no longer justified.
  • This change will make the process of exiting the Safety Module more user-friendly while maintaining necessary protocol safeguards.

Next Steps

  1. Escalate this [ARFC-Addendum] proposal to a Snapshot vote for formal approval.
  2. If [ARFC Addendum] is approved in the Snapshot phase:
  • Implement the whitelist system for service providers to act as StkGHO buy walls.
  • Remove the cooldown diluter from the Safety Module.
  • Update relevant smart contracts and documentation to reflect these changes.

Disclaimer

The Aave Chan Initiative (ACI) independently proposes these changes without external compensation.

Copyright

Copyright and related rights waived under Creative Commons Zero (CC0).

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