[ARC] Community Preference for V3 Migration Levers
Vote Result:
YES - stkAAVE distribution
YES - Increase v2 RFs
NO - all others
Rationale
We support migration from Aave V2 to V3, given the more granular risk controls available and improvements to user experience. We would prioritise incentive levers that are least invasive to current users and minimise bad UX via liquidations. We also prefer levers that do not distort risk parameters on Aave vaults, given this can create risk dislocation in lending markets.
We are supportive of stkAAVE distribution. Despite delegate concerns over the stickiness of this type of incentive, we believe it is the least invasive option, and has publicity benefits in terms of raising awareness for the v3 product and its features. Likewise, we are supportive of raising V2 reserve factors, again because it is a less invasive option.
We believe the other options are too invasive for current borrowers / lenders and will also be overly disruptive to other protocols with existing integrations. We would also support the soft migration option proposed by Wintermute (increase LTVs and LTs on V2 without forced liquidations), although we note this is not part of the current option set.
[TEMP CHECK] - Aave V1 Offboarding Plan
Vote Result: YES
Rationale
We support this proposal to formally offboard Aave v1 in favour of v2 and v3 products. Offboarding users from Aave v1 to v2 and v3 will allow a more streamlined user experience and enable more sophisticated risk controls. The proposed risk parameters are appropriate and we believe this can proceed to AIP voting.
[ARFC] - Configure Isolation Mode Borrowable Assets - V3 Ethereum
Vote Result: YES
Rationale
The potential revenues from this opportunity outweigh the risks. We support whitelisting stablecoins, which have relatively low annualised volatility, for borrowing on Aave V3 Ethereum in Isolation mode. Therefore, we will vote YES in favour of this proposal.
[ARFC] Add LDO to Ethereum Aave v3
Vote Result: YES
Rationale
Adding LDO to the Ethereum v3 Liquidity Pool will diversify the assets offered on Aave and increase user cases. Despite the potential risks involved in terms of the correlation between LDO and stETH, the conservative risk parameters protect Aave from price manipulation and downside risks. Therefore, we will vote YES in favour of this proposal.
1 Like
[TEMP CHECK] Add Support for wstETH on Polygon v3
Vote Result: YES
Rationale
Listing wstETH will create synergies along with existing wETH by increasing its APR and borrowing volume. By doing so, Aave can also facilitate the deployment of similar products on Polygon. Therefore, considering all the benefits, we vote YES.
1 Like
[TEMP CHECK] Polygon v2 to v3 Liquidity Migration
Vote Result: YES
Rationale
We acknowledge that if we let the migration occur in a natural way, there will be more incentive for v3 to update its features and that would be beneficial to its long-term development. However, pure market-based action is slow and often inefficient, which means that despite v3 being more advanced than v2, there will still be users left on v2 because of sluggishness. In this sense, offering incentives for users to migrate creates good for both users and v3 respectively, so we will vote YES in favour of this proposal.
1 Like
[ARFC] Deploy aCRV & CRV to veCRV
Vote Result: veCRV
Rationale
Looking at the above options, we would recommend the veCRV option due to the following reasons:
- No counterparty or smart contract risk from holding sdCRV or yCRV.
- No depeg risk of sdCRV.
- No dependency on third parties (even trusted ones like ACI) to delegate to Aave.
- If governance is the focus for Aaveâs CRV deployment, veCRV is the cleanest form of achieving that governance influence.
- There is no uncertainty after Year 1 about finding new delegators for sdCRV or about earning and deploying SDT.
- Most of the yield displayed on StakeDAO is generated from vote incentives sold for SDT; therefore, if Aave DAO votes for a GHO pool without vote incentives, the overall yield will be lower, and if there are votes incentives paid in AAVE for example, it will create a selling pressure as this will be sold for SDT.
We recognise the main challenge of illiquidity and a lack of flexibility, since Aave would be committed to a 4-year lock-and-hold with no secondary market to attain liquidity. However, if we are long-term aligned to participate in Curve governance and optimise for security compared to the veCRV derivatives, then veCRV makes the most sense.
1 Like
[TEMP CHECK] Aave V3 Deployment on BNB Chain
Vote Result: YES
Rationale
We think it would be sensible to explore Aave deploying on BNB Chain. While there are concerns around the centralised aspects of the chain, with it having only 26 validators and its Proof of Staked Authority consensus mechanism being quite centralised, it is still very prominent in the DeFi ecosystem, being the third-largest chain by TVL, maintaining 1 million unique active addresses transacting each day, and having a host of DeFi apps that Aave could tap into. One of the biggest attractions is that, as mentioned by FranklinDAO, there is a white space since there is yet to be a âblue chipâ money market on BNB Chain. Aave being a flagship DeFi protocol would be extremely well placed to capture that position and gain a significant amount in TVL. Another positive sign is that BNB Chainâs TVL has been steady through most of the bear market.
With regard to the specific parameter recommendations, we hold no position at this moment, and look forward to Gauntlet and Chaosâ analysis.
We will vote YES in favour of this proposal and look forward to further discussing this topic.
Add LUSD to Aave Optimism V3 Pool
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal that we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
Increase Supply Cap for cbETH Aave Ethereum V3
Vote Result: YES
Rationale
Since the supply cap of cbETH was reached in less than 48 hours when raised to 30k, it makes sense to double the supply cap to 60k especially as the change is supported by Chaos Labs and the upcoming Shanghai upgrade on April 12 is likely to make LSDs like cbETH and their pegs more resilient.
Risk Parameter Updates for Aave V2 AMM Market (2023-03-29)
Vote Result: NO
Rationale
The proposal was not published in the community and has not gone through any forum discussions. Current operational data, computation of risk profile and detailed calculations have not been revealed, so it may not be a mature timing to cast a positive vote. Therefore, we will vote NO for this proposal and encourage the authors to go through the correct process.
[TEMP CHECK] - Aave DAOâs $ARB Airdrop Allocation
Vote Result: Mixed Option, Discuss at ARFC
Rationale
We propose a hybrid of Options 1 and 2, with a heavy weightage towards Option 2. Option 2 is the most sensible, especially with the upcoming release of GHO - a Liquidity Mining investment to incentivise GHO minting would be beneficial, and would help grow GHO. As pointed out by @reformedAPE, Option 2 will not be a one-time dump of tokens but will be released over a long period, so if it is done in quarterly tranches then Aave DAO would be able to hold on to ARB tokens and participate in governance. A hybrid of Options 1 and 2 would give the DAO flexibility to also pay service providers and partake in ARB Governance.
If Option 1 is chosen, we are aware of the difficulties of participating in governance for another chain, and Aave DAO must either form a meta-governance group, assign it to one or all Incentivized Delegates, delegate it to an aligned delegate on Arbitrum, or find another solution to this problem. We would suggest discussing the weightings between Options 1 and 2 and how Aave DAO will participate in Arbitrum governance further at the ARFC stage.
Therefore, we will vote for the Mixed Option to discuss further at the ARFC stage.
[ARFC] Add DeFi Saver to flashBorrowers on Aave V3
Vote Result: YES
Rationale
Implementing DeFi saver will eliminate the flash loan fees for its users using Aave and the potential loss in relevant revenue will be compensated by larger borrow volume and more usage of Aave. Therefore we vote YES in favour of this proposal.
Configure Isolation Mode Borrowable Assets on V3 Ethereum
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
Risk Parameter Updates for Aave V2 AMM Market (2023-03-31)
Vote Result: YES
Rationale
Given that there is less activity and utilisation in these two pools and low liquidity as well, and the proposal is a joint recommendation from important stakeholders in the ecosystem that will serve to mitigate risk, we think it is sensible and will vote YES in favour of it.
[ARFC] ACI Service Provider 6-month Proposal
Vote Result: YES
Rationale
This is the follow-on vote for this TEMP CHECK Snapshot proposal we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
Add DeFi Saver to Aave V3 FlashBorrowers
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal that we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
Add UNI, MKR, SNX & BAL to Ethereum v3
Vote Result: YES
Rationale
This is the on-chain vote for the below Snapshot proposals that we voted in favour of. We have linked to our previous rationales for voting in favour of each of them below. Therefore, we will vote YES in favour of this proposal as well.
Isolation Mode Changes for Aave V3 Avalanche, Polygon, and Arbitrum
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal that we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
[TEMP CHECK] - GHO Facilitator Onboarding Process and Application
Vote Result: YES
Rationale
GHOâs launch requires a well thought-out GTM strategy that balances organic demand for GHO with incentives to supply GHO. This proposal provides a formal process for onboarding facilitators and dealing with the supply-side of the problem. Restricting the right of GHO supply to a small initial cohort of facilitators through a formal application and onboarding process ensures vetting for sufficient high-quality candidates to bootstrap liquidity in the most sustainable way. Although the proposal doesnât address the current level of organic demand for GHO and whether this market is mature enough for onboarding facilitators, we believe this should be addressed in future facilitator onboarding proposals in context of the terms of the proposal.