Supply and Borrow Cap Updates Aave V3
Vote Result: YES
Rationale
The supply or borrow caps for these assets have reached the 75% utilisation threshold and need to be increased. Given that the increases are in line with the Supply and Borrow Cap Methodology and the Aave v3 Caps Framework, and stick to increasing either cap by a max of 100%, we are in favour of this proposal and will vote YES.
[ARFC] - GHO Facilitator Onboarding Process and Application
Vote Result: YES
Rationale
The process is simple and straightforward and makes sense. The sample applications are detailed and provide a lot of information to the community about the applicant and their rationales for wanting to be facilitators. Therefore, we will vote YES in favour of this proposal.
[ARFC] Aave V3 Interest Rate Curve Changes (2023-04-27)
Vote Result: YES
Rationale
Making these interest rate curve changes would enable an increase in revenue for the protocol, and Gauntletâs methodology is well-explained in the post. Making these changes would allow for more information to be gathered about user behaviour in response to interest rate changes, informing more pinpointed interest rate parameters going forward. Moreover, the changes can be rolled back in case of unexpected user behaviour, and there does not seem to be too much additional risk from these changes at the moment. Therefore, we will vote YES in favour of this proposal.
[ARFC] E-Mode Specific Supply and Borrow Caps
Vote Result: Option 1: Add EM Specific Caps
Rationale
E-mode specific caps for every LST-base asset pair maximises capital efficiency and siloes the risk due to the differences in characteristics between different LSTs. Gauntletâs methodology is sensible and this vote is not on how aggressive the caps are - since it is only implementing e-mode specific caps. However, we would be in favour of e-mode specific pools as well, without having an opinion yet on an aggressive or conservative cap option. Therefore, we will vote YES in favour of this proposal.
Add MAI 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 AIP as well, especially given the consensus on risk parameters between Gauntlet and Chaos Labs.
Add MAI to Aave Arbitrum 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 AIP as well, especially given the consensus on risk parameters between Gauntlet and Chaos Labs.
MaticX Supply Cap Increase Polygon v3 and AGD Approval
Vote Result: ABSTAIN
Rationale
There was no mention of the AGD-related implementation on the forum and we are in agreement with @MarcZeller. We will also abstain on this AIP to make sure this does not happen again - Llama mentioned the AGD component last in January and there needs to be better signposting on what delegates need to vote on and provide the requisite information.
[TEMP CHECK] Defining the Service Provider & Delegation Platform Relationship
Vote Result: Option 2 - Incentivised Delegates Program excluding Service Providers
Rationale
First, delegates should be rewarded for their efforts put into governance and should receive more than a gas rebate, which only justify the cost of voting. Secondly, existing service providers who also act as a delegate should not be compensated for delegation as there is a conflict of interest if additional payment for governance is given to service providers, which may lead to malicious decisions and unintentional results. As a delegate on Aave, we are inclined to vote for Option 2 and are in alignment with the rest of the commenters on the forum (@fig, @Kene_StableLab, @MarcZeller).
[TEMP CHECK] Safety Module Update Part I - Migrate AAVE/wETH
Vote Result: Option 2 - Migrate to a 80/20 AAVE/wstETH v2 pool
Rationale
We understand there is a need to migrate the Aave Safety Module as a result of the now deprecated Balancer pool. We support Chaosâ recommendation for migrating to a 80/20 AAVE/stETH v2 pool to improve capital efficiency from stETH while limiting the impact of impermanence loss in the equally weighted pool. Therefore, we will vote YES for Option 2 on this proposal.
Upgrade the safety module to v1.5 PART 2
Vote Result: YES
Rationale
Given our vote in favour of PART 1 of upgrading the safety module to v1.5 according to our vote here and rationale here, we will also vote YES in favour of this proposal.
Aave V2 Interest Rate Curve Changes (4-21)
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 AIP as well, and are aligned with Gauntlet on the need to minimise governance overhead and another Snapshot vote even with the inconsistencies outlined in the forum post.
[ARFC] Consolidate Collector Contract & Secure Service Provider Runway
Vote Result: YES
Rationale
There is a need to secure Aaveâs runway to pay service providers in streaming contracts and there is a clear shortfall from the Aave aUSDC stablecoin runway, with the cost of service providers grossly exceeding v2 aUSDC revenue. Given that there are multiple types of USDC and other long-tail stablecoins on Aave which are not being deployed to earn yield, it is better to consolidate these to pay service providers, with the same being applied to the fees accumulated on Paraswap which would be better utilised in paying service providers. Therefore, we are in favour of this proposal and will vote YES.
[ARFC] Migrate Holdings from v2 to v3 and acquire wstETH and rETH
Vote Result: YES
Rationale
Redeeming assets from Aave v2 and depositing them into v3 makes sense given the broader move to v3. Converting wETH and ETH to wstETH and rETH also makes sense to maximise Aaveâs revenue potential and increase the capital efficiency of the treasury. Therefore, we will vote YES in favour of this proposal.
[ARFC] Add LUSD Arbitrum v3
Vote Result: YES
Rationale
Listing LUSD as a borrowable asset but not as a collateral (0% LTV) helps Aave diversify from the current dominance of centralised stablecoins such as USDC used for borrowing. It has proven to work well on Ethereum V2 and V3 and Optimism V3, so adding LUSD to Arbitrum V3 will not be a surprise. We therefore will vote YES in favour of this proposal.
[ARFC] BUSD Offboarding Plan Part II
Vote Result: YES
Rationale
The second phase of BUSD offboarding plan is inevitable given the current situation. Implementing the new parameters will effectively reduce the amount of liquidity in BUSD and encourage users to switch to other stablecoins. Therefore, we will vote YES in favour of this proposal.
[ARFC] Activate emode for rETH Aave Ethereum V3 Pool
Vote Result: YES
Rationale
Incorporating rETH into emode will make it easier for users to gain access to the asset and create more use cases for rETH like leveraged strategies, so we are in support of the proposal. Given that both risk providers are in favour as well, we will vote YES.
Aave V3 Interest Rate Curve Changes (4-27)
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 for Ethereum v3 (05-09-2023)
Vote Result: YES
Rationale
Given that LUSDâs borrow cap has been reached, it is necessary to update it. Since the proposed increase is in line with Gauntletâs Borrow and Supply Cap methodology, we will vote YES in favour of this proposal.
[ARFC] Acquire BB-A-USD and deposit 50% into both Balancer and Aura Finance
Vote Result: YES
Rationale
The expected yield from the BB-A-USD deployment is 9.3%, which is significant. While there is some smart contract risk from using Aura Finance, it is mitigated by Aura having had 3 audits and an Immunefi bug bounty, and by the underlying pool being a core pool at Balancer. Moreso, since Aura is a fork of Convex, its smart contracts are battle tested. Deploying only in the Balancer pool would reduce yield across Ethereum assets by 1-1.25%, which is significant given the expected overall portfolio yield is ~5%.
[ARFC] Add rETH to Aave V3 Arbitrum Liquidity Pool
Vote Result: YES
Rationale
rETH is already listed on Aave Ethereum v3 and expanding it to Arbitrum is a logical next step. Adding more established LSTs like rETH to Aave drives revenue as users deposit the LST and borrow ETH. This is most evident on Ethereum where the LST- and wETH-yield-maximising loop is the source of the vast majority of wETH borrowing demand. Another important point is that of LST diversification - Rocket Pool offers Aave v3 users on Arbitrum an alternative to wstETH, which is very important. Lastly, Chaos Labs and Gauntlet are in favour of this proposal and the risk parameters presented match those on Ethereum v3 and are a combination of the most cautious parameters presented by both risk providers, enabling appropriate risk management.