[TEMP CHECK] Treasury Management - Avalanche v2 to v3 Migration
Vote Result: YES
Rationale
Moving the assets from v2 to v3 will help increase Aave’s capital efficiency due to the higher deposit rates on v3 plus the wAVAX incentives, and there is enough capacity to support the migration of funds. A negative is that 8.3% of the TVL will move to v2 and the borrow rate on v2 will increase in response to migrating funds from v2. However, the aim is to also migrate from v2 to v3, so this proposal would help in this endeavour. Therefore, we will vote YES in favour of this proposal.
[ARFC] Increase MaticX Supply Cap
Vote Result: YES
Rationale
The supply cap of MaticX increased to 88% and the increase in the supply cap to 62M units would only encompass 75% of the total supply which seems fair. Given that the incentive program run by the Polygon Foundation would increase revenue for Aave and that Chaos Labs is in support, we are comfortable in voting YES in favour of this proposal.
Reduce CRV LT by 6%
Vote Result: YES
Rationale
While the execution of this AIP was cancelled due to CRV market price volatility, this AIP continues the series of CRV LT reductions as proposed by Chaos Labs here that we voted in favour of previously. We believe that de-risking the CRV market requires gradual, controlled LT reductions to incrementally wind down the CRV V2 ETH market. Therefore, we will vote YES in favour of this proposal.
Disable CRV Borrowing For Ethereum and Polygon V3
Vote Result: YES
Rationale
This is a prudent step to de-risk the CRV markets on Ethereum and Polygon v3. Shorting CRV via Aave would exacerbate the situation on the v2 markets and stopping this is logical for the protocol. Therefore, we will vote YES in favour of this proposal.
aCRV OTC Deal
Vote Result: NO
Rationale
The debt is still in a relatively healthy position and Michael continues to pay it down, showcasing his intentions. We also think that Curve is not strategically relevant as an asset to acquire because:
- We’re using Balancer to bootstrap GHO liquidity and it’s better initially to concentrate liquidity in one venue.
- The CRV will have to be converted to veCRV and locked up, which is not ideal and essentially bets on the CRV ecosystem. The CRV inflation schedule also indicates that from a GHO perspective, it isn’t the most efficient venue for Aave.
Moreover, the yield is much lower than justified by the allocation although we agree this should not be the primary consideration. As a profit play it may be valuable but this shouldn’t be a profit play and more about risk reduction and treasury allocation, and we don’t think that this reduces risk significantly.
All in all, due to the reasons above, we will vote NO against this proposal. Our rationale is more detailed than the one presented here and it is just a summary, so please feel free to get in touch for further details and explanation.
2 Likes
BUSD Offboarding Plan Part III
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
Supply Cap Increase - wstETH
Vote Result: YES
Rationale
Utilisation for wstETH has been very high and this will bring higher revenues to Aave while staying in the 75% supply cap bound. Chaos Labs is in support and their recommendations have been implemented. Therefore, we will vote YES in favour of this proposal.
[ARFC] Sigma Prime Audit Budget Extension
Vote Result: YES
Rationale
Both BGD and ACI consider the prior engagement with Sigma Prime to have been successful, and the money well spent. Given the existing working relationship and positive performance in the past, it seems natural to extend this agreement with Sigma Prime to cover upcoming security review work, particularly given the billable rate will remain unchanged from the previous engagement. Therefore, we will vote YES in favour of this proposal.
[ARFC] - Chaos Labs Scope and Compensation Amendment
Vote Result: YES
Rationale
Chaos Labs has provided essential risk management services to Aave over the past 9 months. Despite the contract only covering V3 markets, Chaos has served the DAO beyond its remit, including managing V2 risk (e.g., with recent CRV market vulnerabilities). Chaos’ valuable contributions have been witnessed both by our own interactions with the team over the past months plus the positive reviews from other ecosystem contributors. Therefore, we will vote YES in favour of this proposal.
[ARFC] CRV V2 Ethereum Deprecation Plan
Vote Result: YES
Rationale
In light of ongoing discussions there is a clear need to reduce protocol risk to Aave in respect of the CRV Ethereum V2 market. This is a sensible action plan to do so through a series of LT reductions, which has been agreed between both risk providers (Gauntlet and Chaos). Therefore, we will vote YES in favour of this proposal.
[ARFC] Chaos Labs Risk Parameter Updates - Aave V2 Ethereum - 2023.08.09
Vote Result: YES
Rationale
We propose going with the more aggressive option in line with Chaos’ recommendation as there is a negligible difference in terms of liquidated accounts on these frozen markets. These changes are in line with precedent set by previous approved risk parameter adjustments and support continued migration to V3. Therefore, we will vote YES in favour of this proposal.
Gauntlet Recommendation to Freeze CRV on Aave v2 Ethereum
Vote Result: YES
Rationale
This is a unique situation involving a single large collateral position in a low liquidity token whose price has just fallen significantly. Since the priority is in reducing the risk to Aave, we support freezing the market to force the user to pay down the position rather than increasing its risk through collateral top-ups. The user’s recent actions suggest it is working to pay down the position in any case, meaning the proposal should have no meaningful user impact. Moreover, since Gauntlet is in favour and Chaos is not opposed, we have further belief that freezing the market now makes sense. Therefore, we will vote YES in favour of this proposal.
1 Like
stataToken Operational Update
Vote Result: YES
Rationale
This proposal will save Aave development and review costs and pass over governance of contracts not part of the core Aave protocol to Balancer, which is the entity that most uses and benefits from stataTokens. This operational update also allows Aave to efficiently continue supporting and maintaining its relationship with Balancer. Therefore, we will vote YES in favour of this proposal.
Aave v3 Base Activation
Vote Result: YES
Rationale
We voted YES in favour of this TEMP CHECK and this ARFC on Snapshot according to our rationale here, and are in favour of deploying on BASE. Moreover, both Gauntlet and Chaos Labs have aligned on updated supply and borrow caps. Therefore, we will vote YES in favour of this proposal.
Supply Cap Update - stMATIC Polygon v3
Vote Result: YES
Rationale
Utilisation for stMATIC has been very high and this will bring higher revenues and TVL to Aave while staying in the 75% supply cap bound. Chaos Labs is also in support. Therefore, we will vote YES in favour of this proposal.
[ARFC] Increase MaticX Supply Cap
Vote Result: YES
Rationale
Utilisation for MaticX has been very high at 88% and this will bring higher revenues and TVL to Aave while staying in the 75% supply cap bound. Chaos Labs is also in support. Therefore, we will vote YES in favour of this proposal.
[ARFC] sDAI Aave V3 Onboarding
Vote Result: NO
Rationale
While sDAI on Ethereum v3 allows users to earn DSR yield while utilising their assets as collateral, it may have a negative impact on GHO’s peg, which is not good at all. Increasing DAI RF from 10% to 20% on v3 may lower DAI supply rate below the current DSR, which may incentivize DAI supply withdrawal. This will decrease available liquidity when liquidations occur. The need to change Slope1 for wETH is also not clear.
In this case, we ARE supportive of onboarding sDAI to Aave v3 Ethereum, but with modified parameters incorporating Gauntlet and @monet-supply’s feedback. Therefore, we will vote NO against this proposal.
1 Like
Swap Assets to aUSDC
Vote Result: YES
Rationale
This proposal to secure service provider revenue is critical and we have voted in favour of multiple Snapshot and AIPs to get it passed. This is a follow-up proposal to this AIP, which we voted for in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal.
[TEMP CHECK] Aave V3 Deployment on Celo
Vote Result: YES
Rationale
With the decision to pivot to an L2 on Ethereum and the refocus on real world use cases, the value prop of Celo is now much clearer to us than it was before. Celo’s growth over the past few months, supported by its strategic partnerships and targeting of use cases in emerging markets, is a promising sign of the network’s growth even during a bear market. The incentives that the Celo foundation have committed to allocate to Aave V3 shows they are committed to bootstrapping liquidity and ensuring a successful launch. The TVL of Celo is already higher than some other networks that Aave V3 is deployed on. Other blue chip protocols (Uniswap, Sushiswap) have also launched on the blockchain. Therefore, we will vote YES to deploy Aave v3 on Celo.
[ARFC] Aave <> Bored Ghosts Developing (BGD) Phase 2
Vote Result: YES
Rationale
BGD has been invaluable in spearheading Aave’s technical growth and development and are extremely well-suited to the task at hand. We also agree with the logic to reduce scope over time and also think that this should be done in a measured manner. Therefore, we will vote YES in favour of this proposal.