From the technical side regarding the upcoming activation of Aave v3 Ethereum, we think it is reasonable to include as initial rate strategies for WETH and wstETH the ones suggested by @Llamaxyz, the rationale is the following:
- The modifications compared with the current WETH rate strategy on v2 are not too aggressive, mainly only reducing the Base and Slope1 parameters.
- The rate strategy configuration, even if important, is a quite dynamic component of the protocol: it has been designed to be adjusted continuously, following liquidity-driven considerations, like the ones explained in this thread. This means the community can just iterate over it just after release.
- The presence of borrowable wstETH is new for the protocol, so there is no reference for its rate strategy. This proposal introduces it, which is better than just using a default rate strategy for other volatile assets, especially given that there is a quite tight correlation between WETH and wstETH usage mechanics.
- Including this into the activation governance proposal doesn’t really add voting overhead, meaning we don’t identify any NO vote on the activation exclusively because of the rate strategies.
- If further steps via Snapshot are required, that would mean further activation delay.
It is especially important for the community to give feedback on this. For now, we will proceed with the final testing of Aave v3 Ethereum assuming the proposed rate strategies for WETH and wstETH.