[Direct-to-AIP] Parameter Updates - zkSync, Scroll and Sonic

[TokenLogic]

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title: [Direct-to-AIP] Parameter Updates - zkSync, Scroll and Sonic

author: @TokenLogic
created: 2025-08-02

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Summary

This publication proposes updates several parameters on the zkSync, Scroll and Sonic instances of Aave v3.

Motivation

With the introduction of incentives on Scroll, zkSync and Sonic, this publication proposes adjusting the Slope1 and Reserve Factor (RF) parameters on some of the affect reserves.

We recommend increasing the RF on zkSync and Scroll deployments to generate additional revenue, strengthening overal protocol sustainability on these networks. Whilst Sonic provides better revenue generation for the DAO, the RFs on this instance are to remain as is.

With upcoming incentive campaigns expected to significantly enhance user yields. These campaigns will more than offset any reduction in supply APYs caused by this proposal. Therefore, adjustmentin the RF allows the DAO to capture more revenue without materially impacting user experience.

Borrow Rate Updates

For context, the following incentive campaigns are planned for each respective network. Do note, specific details will be provided at time of launch and the below provides some preliminary insights to support Borrow Rate adjustments.

Network	Asset	Deposit	Borrow
zkSync	USDC	-	3.00%
zkSync	wETH	1.50%	1.33%
zkSync	wstETH	-	1.00%
Scroll	USDC	-	2.00%
Scroll	wETH	1.00%	-
Sonic	USDC	-	2.00%
Sonic	S	-	1.00%

The rewards are to be distributed in this manner until depleted.

To balance the introduction of incentives on the Slope1 for USDC, wETH and wstETH across zkSync and Scroll instances of Aave v3 are to be increased. Based upon current conditions, with the introduction of incentive rewards, users will experience a Net Borrow Cost lower than current. The Slope1 for USDC on Sonic is 8.50%, which is significantly higher than other instances of Aave v3 and the introduction of incentives is likely to lead to renewed interest in borrowing USDC.

Specification

The following paramater updates are proposed:

Deployment	Asset	Parameter	Current RF	Proposed RF
zkSync	USDC	RF	10%	15%
zkSync	wstETH	RF	5%	35%
Scroll	USDC	RF	10%	15%
zkSync	USDC	Slope1	5.5%	7.50%
zkSync	wETH	Slope1	2.7%	3.50%
zkSync	wstETH	Slope1	0.75%	1.50%
Scroll	USDC	Slope1	5.5%	7.00%

Implementation is to be performed by the Risk Steward where practical with the remaining parameters to be implemented via an AIP.

Disclaimer

TokenLogic is not compensated for the creation or coordination of this proposal.

Next Steps

1. Gather feedback from the community.
2. Using the Direct-to-AIP process, submit AIP(s) for vote.

Copyright

Copyright and related rights waived via CC0

[LlamaRisk]

LlamaRisk supports the proposed parameter changes, judging that they do not introduce incremental risks to the Aave protocol and will help stabilize the markets after the incentives are enacted.

The proposed increase to the Slope1 parameter is an important preventative measure. As various incentive campaigns target borrow rates, this adjustment will help ensure that market utilization does not exceed its optimal point. This will help preserve sufficient liquidity, allowing the markets to function in a more balanced setup.

Proposed Slope1 Parameter Updates

The proposed change for ETH on zkSync increases the borrow rate at 90% utilization from 2.70% to 3.50%, an absolute increase of 0.80 percentage points. With a current utilization of 52%, the borrow rate would increase from 1.56% to 2.02%. This represents an immediate absolute increase of 0.46 percentage points for current borrowers.

Source: LlamaRisk, 5 August 2025

For USDC on zkSync, the borrow rate at the optimal utilization point is set to increase from 5.50% to 7.50%, an absolute increase of 2.0 percentage points. This market currently has a high utilization of 82%. The rate would rise from 5.06% to 6.91% at this level. This is an absolute increase of 1.85 percentage points at the current utilization.

Source: LlamaRisk, 5 August 2025

The borrow rate for wstETH on zkSync at 90% utilization will double, moving from 0.75% to 1.50%. However, the current utilization for this asset is 0%. The borrow rate is 0% at this level and will remain 0% after the parameter change. Therefore, there is no immediate impact on the borrow rate.

Source: LlamaRisk, 5 August 2025

For USDC on Scroll, the proposal raises the borrow rate at 90% utilization from 5.50% to 7.00%. The current utilization for this market is 68%. The borrow rate will increase at this level from 4.19% to 5.34%. This change amounts to an absolute increase of 1.15 percentage points at current utilization.

Source: LlamaRisk, 5 August 2025

Disclaimer

This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk did not receive compensation from the protocol(s) or their affiliated entities for this work.

The information provided should not be construed as legal, financial, tax, or professional advice.

[ChaosLabs]

Summary

Chaos Labs supports the proposed parameter adjustments across zkSync and Scroll instances of Aave v3.

Motivation

Given the planned incentive campaigns and estimated incentive amounts, interest rate curves can be adjusted to effectively increase protocol revenue without significantly raising net borrowing costs or lowering supply yield. In the next section, we will outline how both borrowing and supply rates will evolve with the proposed parameter changes and expected incentives.

Market Effects

The charts below illustrate how changes in risk parameters will affect Supply and Borrow rate curves. Each line is labeled as either “Prev”, “New”, or “New with Incentives”. While understanding the changes to the underlying rate curves is essential, the actual market conditions must also consider the provided incentives.

zkSync

Proposed changes to zkSync focus on USDC, wstETH, and wETH, adjusting either Slope1 or Reserve Factor.

As can be seen on the chart, even though USDC’s RF is increasing by 50% and the interest rate at UOptimal shifts from 5.5% to 7.5% the effective Supply and Borrow rates are significantly better than previously due to the expected incentives.

The proposed changes for wstETH affect both Reserve Factor (RF) and Slope 1 more significantly than USDC. The RF will increase by 30% while Slope 1 will double. Despite these changes, the supply rate will see a net increase due to the significant rise in Slope 1. Furthermore, borrowing will become effectively cheaper for users as the 1% borrow incentives will reduce the effective rates across all utilization levels.

With the proposed increase in Slope 1 for wETH, the both borrow and supply rates will see a significant increase, however due to incentives effective rates for both suppliers and borrowers are going to be significantly better.

Scroll

With a 5% increase in RF and a 1.5% increase of Slope 1, the borrow rate at kink will increase accordingly by 1.5%. However, the significant incentives will compensate for this increase. Additionally, as the nominal borrow rate increases, supplier participation will also be incentivized, with Supply Rates increasing by 1.275% at optimal utilization across all utilization levels.

Recommendation

Given the market conditions, expected incentives, and no additional risk introduced to the protocol, we support the proposed changes to the risk parameters for the zkSync and Scroll deployments. The overall increases in RF and Slope 1 parameters will increase revenue for the protocol, while the incentives will improve effective rates for both borrowing and supplying users.

Specification

The following parameter updates are proposed:

Deployment	Asset	Parameter	Current RF	Proposed RF
zkSync	USDC	RF	10%	15%
zkSync	wstETH	RF	5%	35%
Scroll	USDC	RF	10%	15%
zkSync	USDC	Slope1	5.5%	7.50%
zkSync	wETH	Slope1	2.7%	3.50%
zkSync	wstETH	Slope1	0.75%	1.50%
Scroll	USDC	Slope1	5.5%	7.00%

Next Steps

We will move forward and implement these updates via the Risk Steward process where necessary. Reserve factor updates will be performed via AIP.

Disclaimer

Chaos Labs has not been compensated by any third party for publishing this recommendation.

Copyright

Copyright and related rights waived via CC0