[ARFC] TUSD Offboarding Plan

Authors: Gauntlet, Marc Zeller @marczeller - Aave-Chan Initiative

Date: 2023-07-13


This proposal aims to initiate the offboarding process for TUSD from the Aave V2 Ethereum pool. The process will follow a similar process as the BUSD offboarding plan part I.

Gauntlet does not quantify risk associated with centralized stablecoins and regulatory concerns. In light of this, we provide this framework with ACI to the community to gauge preference and thoughts around further TUSD deprecation.


TUSD has been a historic asset of the Aave ecosystem, but due to recent events, the ACI suggests consideration of its offboarding. The offboarding plan leverages the previous success of the BUSD offboarding plan and will incentive current users to slowly migrate their positions to other stablecoins on Aave.

Previous proposals have frozen TUSD and lowered TUSD LT to 77.5%. These proposals have reduced TUSD borrow and supply over the past 30 days, from 20M supplied and 18M borrowed, to 13.1M supplied and 6.8M borrowed today.


The following table outlines the proposed changes to the TUSD risk parameters:

Parameter Current Value Proposed Value
LTV 75% 0%
Liquidation Bonus 5% 10%
Reserve Factor 25% 95%
Borrowing Enabled Yes No
Stable Borrowing Enabled Yes No
Base Rate 0% 3%
Slope1 4% 7%
Slope2 100% 200%
UOptimal 80% 20%

Meanwhile, Gauntlet provides the following options to lower LT.

  • This sets immediate bounds on the maximum debt that can be taken out with TUSD collateral, however it may force liquidate users.

Option 1: lower LT to 75%.
0 Forced liquidations, as of data on 2023.07.13.

Option 2: lower LT to 60%.
Forced liquidations - total ~ $877k in supply, 4 accounts, as of data on 2023.07.13

Address Health Factor Health Factor with New Parameters Total Borrows (USD) Total Supply (USD) Assets Borrowed Assets Supplied
0x16af29b7efbf019ef30aae9023a5140c012374a5 1.05 0.82 644897.59 877486.0 [WETH] [TUSD]
0xd4b954c7dbd77c2fadcd66ec681dd992e97a9374 1.05 0.81 80.69 109.0 [WETH] [TUSD]
0xb56b29401afcc285d7b967a3164bfa58f94f70e7 1.10 0.85 73.04 103.0 [USDC] [TUSD]
0x017b3763b8a034f8655d46345e3eb42555e39064 1.05 0.81 0.00 0.0 [SNX] [TUSD]

Option 3: lower LT to 40%.
Forced liquidations - total ~ $920k in supply, 7 accounts, as of data on 2023.07.13

Address Health Factor Health Factor with New Parameters Total Borrows (USD) Total Supply (USD) Assets Borrowed Assets Supplied
0x16af29b7efbf019ef30aae9023a5140c012374a5 1.05 0.54 644897.59 877486.0 [WETH] [TUSD]
0xe66c21632e5fe9884b43c9b2573a61373a7264d9 1.02 0.98 27214.96 32409.0 [WETH, USDC, TUSD] [AAVE, WETH, USDC, TUSD]
0xea40afcba852f3c9b4d47f91b5ca6924283498df 1.42 0.91 6401.85 11479.0 [USDC, DAI] [WBTC, USDC, TUSD]
0xd4b954c7dbd77c2fadcd66ec681dd992e97a9374 1.05 0.54 80.69 109.0 [WETH] [TUSD]
0xb56b29401afcc285d7b967a3164bfa58f94f70e7 1.10 0.57 73.04 103.0 [USDC] [TUSD]
0x2648e99bc8ebf9164cff4b0432d0522618e65241 1.67 0.86 11.03 24.0 [DAI] [TUSD]
0x017b3763b8a034f8655d46345e3eb42555e39064 1.05 0.54 0.00 0.0 [SNX] [TUSD]


This proposal is powered by Skyward. The Aave-Chan Initiative is not presenting this ARFC on behalf of any third party and is not compensated for creating this ARFC.

Next Steps

Welcome community feedback and initiate snapshot on 2023.07.24. If the Snapshot outcome is YAE, this proposal will be escalated to AIP stage.


Copyright and related rights waived via CC0.


Hello @Gauntlet and thanks for publishing this proposal.

With the recent events of TUSD, the Risk/reward ratio to keep this centralized asset as part of the Aave pool assets is not favorable anymore. we’re thus favorable of this offboarding plan.

With the ACI according to our doctrine, unless there’s a direct & imminent threat to the protocol, we will always support the option that is the least hurtful to the Aave users.

We will vote YAE to Option 1.

1 Like

We support the off boarding of TUSD as it carries many risks right now. We will be supporting gradual decreases that are the least impactful regarding liquidations for Aave users.

Option 1 is a great start.

this proposal has been escalated to Snapshot stage

Voting starts tomorrow.

1 Like

This is bad for people who have borrowed TUSD and are basically shorting it this way. Waiting for TUSD to depeg, but instead with this construct you shot my interest rate to 200%!

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