Hey Aave Fam, the Boardroom team is going to resume the Weekly governance updates. We will be covering the key happenings in Aave Governance for the past week.
Before we begin, the Aave Governance call will be held on today, Tuesday 1 PM EST. Please add it to your calendar from the Google calendar button below, do make sure to click on ‘save’. Alternatively, you can also add the event to your calendar with this link
On Chain Votes
AIPs: Active & Queued
Aave Governance v3 - Activation Plan AIP
Status: Active, by @bgdlabs
The AIP titled “Aave Governance v3 - Activation Plan” outlines the transition from Aave Governance v2 to v3. This includes:
- Migration Governance v2 to v3: Two migration governance proposals will simultaneously disable v2 and enable v3, with the process taking approximately 21 days. A mediator smart contract will be used to execute both Level 1 (Short) and Level 2 (Long) proposals synchronously.
- Key Actions: Upgrading AAVE and stkAAVE implementations, transferring ownerships to Governance v3 executors, and resetting all delegations post-execution.
- Implications: The upgrade affects Aave’s smart contract infrastructure, permissions, user interface, and cross-chain governance. All permissions will be migrated to new executors, and a new user interface will be developed for v3. Voting assets (AAVE, aAAVE, stkAAVE) have been adapted for v3.
- Voting and Governance: Polygon PoS and Avalanche C-Chain will be the initial voting networks, with Ethereum as a backup. The Aave DAO will subsidize voting costs on Polygon and Avalanche.
Original Proposal | Forum Discussion.
Chaos Labs RF and IR Updates - Aave V2 Ethereum AIP
Status: Passed, Queued. By @ChaosLabs
This proposal, titled “Chaos Labs RF and IR Updates - Aave V2 Ethereum,” aims to update Reserve Factors (RF) and Interest Rate (IR) curves for frozen assets on Aave V2 Ethereum as part of the ongoing deprecation plan. It proposes increasing the RFs of all frozen assets on V2 Ethereum to nearly 100% and raising borrow rates across V2 frozen assets. These measures are designed to discourage the supply of deprecated assets and encourage the repayment of borrowed assets. The proposal outlines detailed RF and IR adjustments for various assets, including CRV, SNX, MKR, DPI, and others.
Original Proposal | Snapshot | Discussion.
Treasury Management - Transfer AURA to GLC SAFE AIP
Status: Active, Queued. Authors - MatthewGraham, @Sisyphos & @efecarranza
The proposal, titled “Treasury Management - Transfer AURA to GLC SAFE,” involves transferring all AURA holdings from the Ethereum Treasury to the GHO Liquidity Committee (GLC) SAFE. The Aave DAO aims to consolidate its vlAURA holdings by converting 443,674 AURA to vlAURA. This action is expected to yield substantial returns, as delegating vlAURA to Paladin currently generates significant weekly earnings. The GLC is responsible for managing these holdings on behalf of the Aave DAO.
Original Proposal | Snapshot | Discussion
GHO update on Aave V3 Ethereum Pool
Status: Active, Queued.
This proposal addresses a technical issue reported on November 13, 2023, regarding GHO integration on Aave V3 Ethereum. A valid issue was identified through the GHO bug bounty program but deemed to have limited and negligible impact. A technical patch was developed in collaboration with Certora, providing a permanent solution without altering existing GHO features in the Aave Pool. No action is required from users, and further details will be shared after the AIP’s successful execution.
Original Proposal | Forum Discussion
Gauntlet Recommendation to Re-enable CRV Borrowing on V3 Ethereum/Polygon AIP
Status: Active. By @Gauntlet
The proposal, “Gauntlet Recommendation to Re-enable CRV Borrowing on V3 Ethereum/Polygon,” follows the disabling of CRV borrowing during the Vyper exploit. With the reduction of excess risk CRV positions, Gauntlet suggests reactivating CRV borrowing. This includes lowering the supply cap on Ethereum V3 from 51m to 7.5m, the borrow cap from 7.7m to 5m, and the debt ceiling from $5m to $1m due to low usage. Similarly, on Polygon V3, the borrow cap is proposed to be reduced from 900k to 300k, with a reactivation of CRV borrowing.
Original Proposal | Forum Discussion.
AIPs: Executed
AIP: GHO_Incident_Report
Status: Executed on Dec 04, 2023. By @AaveLabs
The executed AIP “GHO_Incident_Report,” dated December 4, 2023, outlines a bounty of 50,000 GHO for a community member who reported an incident with GHO. It details the transfer of 50,000 GHO from the collector to a specific address (0x7D51910845011B41Cc32806644dA478FEfF2f11F) as a reward for this crucial detection.
Proposal Link | Snapshot | Forum
Update Price Oracle Sentinel AIP
Status: Executed on Dec 08, 2023. bgdlabs
This AIP, titled “Update Price Oracle Sentinel,” was executed to align the Aave PriceOracleSentinel’s logic across Arbitrum and Optimism (OP) stack. It addresses the differences in Chainlink feed behavior between these networks, specifically the L2Sequencer’s update frequency. The proposal involved updating the PriceOracleSentinel contract on Aave V3 for Arbitrum, Optimism, Base, and Metis networks to ensure precision and avoid downtime.
Proposal Link | Discussion | Snapshot
Aave Funding Updates AIP
Status: Executed on Dec 09, 2023.
Authors: @TokenLogic - MatthewGraham, @scottincrypto
r3genFinance - @Elliott_r3gen, @Pepperoni_Jo3_r3gen
The AIP titled “Aave Funding Updates” focused on consolidating Aave DAO’s stablecoin holdings. It included depositing DAI into aEthDAI, migrating aDAI and aUSDT to aEthDAI and aEthUSDT, bridging assets from Polygon to Mainnet, and converting some holdings into GHO. The aim was to ensure the DAO is well-capitalized, particularly in light of upcoming new service provider proposals, with actions involving the deposit and migration of significant amounts of DAI, USDC, and USDT.
Original Proposal | Discussion | Snapshot
Reserve Factor Updates - Polygon Aave v2 AIP
Status: Executed on Dec 09, 2023. TokenLogic
The AIP titled “Reserve Factor Updates - Polygon Aave v2” was executed to increase the Reserve Factor (RF) for assets on Polygon v2 by 5%, up to a maximum of 99.99%. This is a continuation of AIP 284. The aim was to reduce deposit yield on Polygon v2 by increasing the RF, encouraging users to migrate from Polygon v2 to v3. The increase in RF directs a larger portion of interest paid by users to Aave DAO’s Treasury. The changes in RF percentages for various assets like DAI, USDC, and wBTC are specified in the proposal.
Original Proposal | Discussion | No Snapshot was posted
Onboarding wstETH to Aave V3 on Base Network AIP
Status: Executed on Dec 09, 2023 By MarcZeller
This AIP involved the onboarding of wstETH (wrapped staked ETH) from Lido to the Aave V3 Base Network, aimed at enhancing the diversity of the ecosystem’s liquid staking assets. The integration of wstETH is intended to provide Aave users with more opportunities to earn staking rewards on their collateral, thereby reinforcing Aave’s status as a diverse and inclusive DeFi protocol. The AIP specified various risk parameters for wstETH, including a supply cap of 4,000 wstETH, a borrow cap of 400 wstETH, and detailed parameters for borrowing and liquidation.
Original Proposal | Snapshot | Discussion
Gauntlet <> Aave Renewal 2023 AIP
Status: Executed on Dec 09, 2023. By Gauntlet
The “Gauntlet <> Aave Renewal 2023” AIP proposed renewing Gauntlet’s 12-month engagement for continuous market risk management with Aave. The objective is to maximize capital efficiency and minimize risks of insolvency and liquidations. Since 2021, Gauntlet has provided risk quantification, optimization, stress testing, and dynamic parameter calibration, using agent-based simulation models. The renewal, covering Aave V2, V3, GHO, and Insolvency Refund, involves a fixed annual fee of $1,600,000 (half in GHO, half in aUSDT), with a portion allocated to an insolvency refund vault and the rest distributed linearly over the year.
Original Proposal | Discussion | Snapshot
Snapshot
Treasury Management - Transfer AURA to GLC SAFE
Status: ARFC, Passed Snapshot. By karpatkey_TokenLogic
This proposal, “Treasury Management - Transfer AURA to GLC SAFE,” suggests transferring AURA holdings from the Ethereum Treasury to the GHO Liquidity Committee (GLC) SAFE. It aims to consolidate the Aave DAO’s vlAURA holdings by converting AURA to vlAURA, which is expected to yield significant returns. The GLC will manage these holdings on behalf of the Aave DAO, with a strategy of delegating vlAURA to Paladin for additional yield.
New Chain Deployment Framework
Status: Proposed, Snapshot Passed. By 0xTogbe
The proposal titled “New Chain Deployment Framework” seeks community approval for a standardized process to deploy the Aave Protocol on new blockchains. The framework is designed to be transparent and community-driven, focusing on evaluating and deploying new Aave v3 instances. It addresses the challenges of unclear processes and extended timelines in current deployment practices. The proposal maintains the existing steps of governance (TEMP CHECK, ARFC thread, Snapshot vote, and AIP vote) but introduces clearer timelines and requirements for transitioning between stages, aiming to balance security, efficiency, and speed in new chain deployments.
Update GNO Risk Parameters on Aave V3 Gnosis Pool
Status: Proposed, Snapshot passed. By marczeller
The proposal aims to update the risk parameters for GNO (Gnosis Token) on Aave V3 Gnosis Pool, enabling it as a borrowable asset outside isolation mode. This change is geared towards enhancing GNO’s utility, fostering Gnosischain decentralization, and offering more use-cases for passive income and staking. The modifications include maintaining GNO’s status as a collateral asset while enabling borrowing and keeping the Loan To Value (LTV) at 31%.
AAVE Treasury Proposal for RWA Allocation with Maple Finance
Status: Proposed, Snapshot Defeated. By Maple_Direct
The proposal aims for Aave’s Treasury to allocate stablecoins into Maple Finance’s cash management pool, beginning with an initial investment of 1M USDC. This move is part of Aave’s strategy to diversify into Real World Assets (RWA), enhancing treasury management. The plan includes gradual and compliant investment processes, with community approval at each stage. The proposal will undergo a snapshot vote and, if successful, progress to an on-chain AIP.
Onboarding ETHx to Aave V3 Ethereum Market
Status: Proposed, Snapshot Passed. By 0xTogbe
The proposal focuses on onboarding ETHx (Ethereum Staked) as a new asset to the Aave V3 Ethereum market. ETHx is a liquid staking derivative of staked ETH, offering users continued liquidity while their ETH is staked. The proposal aims to enhance the utility and inclusivity of the Aave ecosystem by introducing a new asset class, thereby providing users with more options for liquidity and investment.
Addition of sfrxETH from Frax to Aave V3 Ethereum Market
Status: Proposed, Active
The proposal focuses on adding sfrxETH from Frax to the Aave V3 Ethereum market, aiming to enhance liquid staking derivative (LST) diversity. sfrxETH allows users to mint frxETH in exchange for ETH deposits. The initiative seeks to support LST variety, following the precedent of supporting assets like cbETH and rETH. Two sets of risk parameters, conservative and aggressive, are proposed for sfrxETH, with varying caps, liquidation parameters, and borrowing conditions. The proposal will progress through community feedback, a snapshot vote, and the potential development of an AIP.
Continuous Security Proposal for Aave by Certora
Status: Proposed, Active. By Shelly
The proposal seeks to extend Certora’s security services for Aave for one year, with a budget of $1.5m starting September 14, 2023. Services include governance proposal reviews, assistance in reviewing Immunify bug bounties, continuous formal verification, and incident investigation support. Certora has previously reviewed 169 smart contracts and prevented 28 significant bugs. The payment structure involves $1M in GHO and $500,000 in Aave tokens, both vested over a year. The proposal will progress through community feedback, a snapshot vote, and potentially an AIP.
Proposal Addressing Bad Debt from Harmony Network Exploit AIP
Status: Proposed, Active. By mbarret3 & Selvy
This proposal aims to resolve the bad debt incurred by the Aave protocol on the Harmony network following the June 2022 Horizon Bridge exploit. It suggests creating a fund with contributions from both Harmony and Aave to compensate affected AAVE holders. The fund would enable Aave holders to withdraw 20% of their original deposit value, using resources pooled from both parties. The proposal requires Aave DAO governance approval and, if passed, will implement a smart contract for the token exchange and fund creation. Aave currently holds bad debt of approximately $751K due to this exploit.
TokenLogic & karpatkey Service Provider Partnership AIP
Status: Proposed. By TokenLogic karpatkey
The proposal aims to onboard TokenLogic & karpatkey as service providers for financial services to Aave DAO for 180 days, with a budget of 400k GHO. They will handle Treasury Management, Strategic Assets’ Liquidity, and Safety Module. This partnership is expected to develop a robust architecture for asset management, secure financial stability for Aave DAO, and manage liquidity incentives. The proposal includes various operational and strategic initiatives to optimize Aave’s treasury and liquidity management.