We appreciates the Babylon team putting this ARFC forward. Aave Labs has been working closely with Babylon on the TBV integration with Aave V4 over the past months and remain actively engaged as the integration moves toward launch. Throughout this process, Aave Labs has supported Babylon on all questions related to Aave V4 features and integration, and has carried out a thorough review of the integration. This review confirmed that it works as intended with Aave V4, preserves the trust assumptions of the canonical Spoke, includes the security and risk levers that the Aave Protocol and a use case of this sophistication require, and meets Aave quality standards. On risk parameters, we defer to LlamaRisk and support their recommendations.
Below is an overview of how this deployment will be governed and secured, along with information for users and integrators.
Governance
As outlined in the Babylon post, the new 2 spokes are governed by the DAO and follow the same governance strategy than the rest of instances. In line with the hardening process, the Protocol Security Council remains as the owner for now. Risk stewards are being considered.
Security Procedures
Aave Labs is running a security review and auditing the contracts on the Babylon contracts specific to the integration, covering:
- Two review rounds by the Aave Labs team, using manual review and AI tooling
- Independent reviews by an external security researcher
- A review by Certora, using manual review and formal verification
Reports will be shared once the security procedures are complete.
Aave Pro Support
In the initial integration, users will be able to view the Babylon market and their positions directly within the Aave Pro interface. Transactional actions will redirect to the Babylon interface through deep links.
Aave Pro will also include a new Integrations page, which highlights supported third-party integrations.
For Integrators
Integrations with this market go through Babylon’s adapter contracts. The Aave SDK will not support actions on this market at launch, in line with Aave Pro offering read-only access. Babylon supports this integration through its SDK, available in the Babylon Toolkit repository.
Liquidations on this market work differently from other Aave V4 markets. To support liquidators and integrators, dedicated documentation will be produced. We will share details in a follow-up reply.
We look forward to the community’s feedback.
Aave Labs