Increase wMATIC Supply Cap & BAL Borrow Cap
Vote Result: YES
Rationale
There is likely to be significant inflow of wMATIC into Aave Polygon v3 due to the Balancer liquidity pools and Polygon’s liquidity mining program. There is a need to increase the supply cap which will not be able to accommodate the increased supply, and not increasing the cap would inhibit growth. Both Chaos and Gauntlet are in support of this proposal. Therefore, we will vote YES in favour of this proposal.
[ARC] E-Mode Parameter Changes for V3 Avalanche, Optimism, Polygon, and Arbitrum
Vote Result: OPTION 1
Rationale
We recommend Option 1, since we agree with Wintermute that for users to use e-mode, it needs to offer more capital efficient parameters than regular borrowing, which is achieved under Option 1 while still offering various trading strategies.
We voted on Option 1A last time, which is similar to Option 1 in this proposal, except the LTV is 2% higher, and think that our previous rationale still holds.
Regarding the other options, Option 2 limits e-mode to mostly ‘USDC’ based stablecoins, while Option 3 is just a more conservative version of Option 2. This reduces the benefits of e-mode significantly, one of which is arbitrage between stablecoins. Lastly, Option 4 does not make sense since stablecoin e-mode is still valuable.
Therefore, we will vote YES in favour of Option 1.
[TEMP CHECK] - Launch Aave V3 on Starknet
Vote Result: OPTION 1
Rationale
Starknet is a fast-growing Layer 2 solution, and Phase 1 of deploying Aave on Starknet has already taken place successfully. There are a few reasons as to why deploying on Starknet makes sense:
A point of concern may be the $200k grant to Starknet, but as the team have said the rest of the development costs are being covered by Starknet, and there will be a community vote to gauge sentiment on this grant, we will vote in favour in lieu of further discussion. It would be helpful for the community if the Starknet team discloses the total costs of deploying Aave on Starknet for the community to be able to better judge the efficacy of the $200k grant.
All in all, we will vote YES in favour of this proposal.
[TEMP CHECK] Incentivized Delegate Campaign (3-month)
Vote Result: 45% Flipside, 45% TokenLogic, 10% FranklinDAO
Rationale
Having participated heavily in the Aave ecosystem over the last 6+ months, LBS Blockchain Society has had a keen insight into how Aave governance operates. We will split our votes between TokenLogic (45%), Flipside (45%), and FranklinDAO (10%), based on the manner in which we have interacted with them and observed their governance participation, initiative to improve governance, and general presence within Aave governance.
We would have allocated a higher percentage to FranklinDAO, but based on a conversation with them and their support for Flipside, combined with our very positive experience in working with Flipside, will vote equally for Flipside and TokenLogic.
Regarding the latter, we have observed the impact that Matthew and Llama have had on the Aave ecosystem, and he individually has contributed a lot to Aave’s growth. There is a potential conflict of interest; however, there are a few counterpoints to this: he does not hold Llama’s voting keys or participate in voting decisions, there are other examples of service provider-delegate platforms within Aave governance like ACI, and TokenLogic plans to operate as the latter in shipping code and improvements to Aave rather than simply voting. GHO also falls outside of Llama’s purview and we are confident that TokenLogic can fill this gap.
Increase wstETH Borrow Cap on V3 Arbitrum (4/5/2023)
Vote Result: YES
Rationale
Given that the borrow cap for wstETH has been reached and increasing it according to Gauntlet’s methodology makes sense, we will vote YES in favour of this proposal.
[ARFC] Align AAVE Risk Parameters on Aave V3 Ethereum Market with Aave V2
Vote Result: YES
Rationale
Since a core consideration for Aave over the next few months is to encourage migration from v2 to v3, aligning risk parameters for AAVE on Ethereum v3 to replicate those on v2 is sensible, does not add additional risk to the protocol, and smoothens the process of migrations. Moreso, Chaos Labs is in favour of this proposal. Therefore, we will vote YES in favour of this proposal.
[TEMP CHECK] Aave V3 Deployment on zkSync Era Mainnet
Vote Result: YES
Rationale
zkSync Era has launched with many DeFi offerings, and it would be good for Aave to have a presence on one of the first and foremost zkEVMs. Deploying on zkSync will also help Aave maintain its position as a flagship, cross-chain DeFi protocol and as the premier lending and borrowing platform in crypto. Moreover, the Aave community has already previously voted to deploy the Aave V3 codebase on zkSync’s v2 Testnet. This would be a natural follow-up. The development effort due to the EVM equivalence of zkSync would be minimal. Deployment also fits in with Aave’s goal of expanding across L2s and the Ethereum ecosystem and other chains. Therefore, we will vote YES in favour of this proposal.
Add LDO to Ethereum Aave v3
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.
Risk Stewards Phase 1 - CapsPlusSteward
Vote Result: YES - 100% Max Increase Every 5 Days
Rationale
The launch of Risk Stewards will reduce the repetitive work for the governance team and free more time to focus on more important proposals. Also, since increasing supply and borrow caps will not likely cause any risk-related concerns, and can be executed using the mechanism, we are in favour of the 100% max increase every 5 days option to ensure flexibility in adjusting risk parameters. Therefore, we are in favour of this proposal and will vote YES.
[ARFC] Aave V1 Offboarding Plan
Vote Result: YES
Rationale
V1 is an obsolete version of Aave and migrating users on V1 to the latest V3 will make Aave more efficient. It is reasonable to make V1 less attractive than before to facilitate the migration. Therefore, we will vote YES in favour of this proposal.
[TEMP CHECK] - Whitelist Stargate for V3 Portals
Vote Result: YES
Rationale
Stargate is battle tested and LayerZero’s messaging infrastructure is impressive, making the combination a worthy addition to Portals. The 2bps of every transaction to Aave DAO is a good incentive and indicates Stargate’s willingness to collaborate, while giving users more options to use collateral cross-chain helps increase Aave’s stickiness in general. Lastly, expanding the number of bridges on Portals is good for the Aave ecosystem. Therefore, we will vote YES in favour of this proposal.
ACI Service Provider Proposal
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.
Aave v2-v3 Collectors Unification
Vote Result: YES
Rationale
This is a relatively simple proposal that reduces operational overhead and makes Aave’s infrastructure less convoluted. Since it only re-shuffles live contracts and does not pose a security concern, we will vote YES in favour of this proposal.
Update AAVE V3 ETH Risk Parameters
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.
Risk Parameter Updates Aave V3 Optimism
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] - Community Preference for Supply Cap Limits for LSTs
Vote Result: YES
Rationale
Given MaticX’s current utilization of 98.31%, the 50% supply cap limit is relatively conservative and hinders the growth of the protocol to a certain extent. 75% supply cap limit is a more balanced target and allows room for further growth and profitability. Moreover, setting the 75% supply cap limit does not necessarily mean that the supply cap must reach 75%. Instead, like Llama suggests in the discussion, a smaller increase in the supply cap can be implemented depending on the risk profile of the specific asset. On the risk side, although it is true that the 50% supply cap limit provides an additional safety cushion for Aave, when it comes to extreme cases, such as the breakdown of Lido or Stader, the loss under the 50% supply cap limit is still not negligible. Therefore, there is actually not as much difference to set the supply cap limit to be higher.
[ARFC] Add MAI to Arbitrum Aave V3 Pool
Vote Result: YES
Rationale
It is important to increase Aave’s stablecoin diversity and increase Aave’s offering to support more volatile assets and increase revenue, backed by appropriate debt ceilings and borrow and supply caps enabled by v3. Moreover, Chaos Labs supports the proposal and initial parameters are relatively conservative. A potential point of concern is that MAI is a low market cap asset that could prove to be volatile and subject to price manipulation and attacks. This, however, is mitigated by the relatively conservative risk parameters set.
Therefore, we will vote YES in favour of this proposal.
[ARFC] Add MAI to Optimism Aave V3 Pool
Vote Result: YES
Rationale
It is important to increase Aave’s stablecoin diversity and increase Aave’s offering to support more volatile assets and increase revenue, backed by appropriate debt ceilings and borrow and supply caps enabled by v3. Moreover, Chaos Labs supports the proposal and initial parameters are appropriate for the liquidity for Optimism and are also relatively conservative. A potential point of concern is that MAI is a low market cap asset that could prove to be volatile and subject to price manipulation and attacks. This, however, is mitigated by the relatively conservative risk parameters set.
Therefore, we will vote YES in favour of this proposal.
[ARFC] Deprecate Aave V2 AMM Market
Vote Result: YES
Rationale
There is low usage of the V2 AMM market and deprecating it would not harm user experience since the only available assets in the market are available on both V2 and V3 ETH, providing ample user optionality. Moreso, this is only a Snapshot vote that is only indicative, and gives affected users with $150k of LP tokens to adjust their positions in order to not get liquidated. Given the risk/return profile of V2 AMM is low, we are in favour of this proposal and will vote YES.
[ARFC] Private Voting for Aave Governance [2-month Trial]
Vote Result: YES
Rationale
As the authors of this proposal, we will vote YES in favour.