[TEMP CHECK] Proposal for Senate to Enable Dedicated Tooling for Aave Governance
Vote Result: YES
Rationale
Implementing these features is a net positive for Aave and will help smoothen some of the frictions associated with governance. Senate has received a grant from AGD and already built and tested these features. They have also completed a technical review with Aave Companies. Therefore, we will vote YES in favour of this proposal.
[ARFC] Quarterly Gas Rebate Distribution - August 2023
Vote Result: YES
Rationale
In line with our previous votes for gas rebates (here, here, and here), we are in favour of this proposal as well and will vote YES in favour.
Reserve Factor Updates - Polygon Aave v2
Vote Result: YES
Rationale
Following this AIP which we voted in favour of according to our rationale here, we will vote YES in favour of this proposal as well.
Sigma Prime Audit Budget Extension
Vote Result: YES
Rationale
This is the on-chain proposal for this Snapshot that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
SupplyCapLSTs
Vote Result: NO
Rationale
While the supply caps have reached their thresholds and increasing them would potentially bring additional revenue to Aave, we are in alignment with Gauntlet here. Their logic for not increasing the stMATIC supply cap is well thought out and makes sense, and adding excess risk to Aave is not sensible especially if the reason for increasing the supply cap in the first place is not being fulfilled (greater wMATIC borrows via the recursive strategy). Therefore, we will vote NO against this proposal.
Chaos Labs Risk Parameter Updates
Vote Result: YES
Rationale
As with the other proposals to reduce capital efficiency on v2 markets and promote migration to v3, we are in favour of this proposal and will vote YES.
[TEMP CHECK] Update Balancer Ecosystem Holdings
Vote Result: YES
Rationale
This is a TEMP CHECK and it would be good to further explore the proposition to move to vlAURA from veBAL with more community input. It would also be good to get further detail on the cost of acquiring vlAURA via OTC deals and the cost of selling the B-80BAL-20ETH BPT, along with the required dev resources to add vlAURA support to the StrategicAssetManager. Therefore, without having an opinion on which of the vlAURA or veBAL routes are correct, we will vote YES in favour of this proposal to get further detail to inform our final decision.
Quarterly Gas Rebate Distribution August 2023
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.
AURA OTC Deal
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.
Freeze MAI/MIMATIC, set LTV → 0 for Arbitrum, Avalanche, Polygon, Optimism v3
Vote Result: YES
Rationale
MAI/MIMATIC has lost its peg and not freezing the market may add additional risk. Moreover, the asset also has a history of losing its peg, so mitigating risk at the moment is important. Therefore, we will vote YES in favour of this proposal.
[TEMP CHECK] Update Balancer Ecosystem Holdings
Vote Result: YES
Rationale
This is a re-vote for this Snapshot proposal that did not reach quorum which we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
[ARFC] TokenLogic - 6 Month Service Provider Proposal
Vote Result: YES
Rationale
This is the ARFC for this TEMP CHECK that we voted in favour of according to our rationale here. Therefore, we will vote YES in favour of this proposal as well.
Freeze Stewards
Vote Result: YES
Rationale
Enabling a FreezingSteward on all networks will allow admins to, in cases of stress or where urgent action is required, to respond quickly and effectively and also maintain consistency across all deployments. Therefore, we will vote YES in favour of this proposal.
[ARFC] Aave Treasury Proposal for RWA Allocation
Vote Result: YES
Rationale
Following the TEMP CHECK, we think that Centrifuge has provided sufficient colour to the proposal, including 1) a detailed breakdown of the legal structure, 2) a detailed understanding of the assets that are being invested in, and 3) answered all questions that have been posed by the community. Moreover, Anemoy has also provided enough information about the funds that are to be invested in. Lastly, an initial $1m investment plus a set-up of the legal structure for further RWA investments by Aave is beneficial for the community, leaving ample room open for an RFP process when the framework is defined by the community. Therefore, we will vote YES in favour of this proposal.
[ARFC] Gauntlet Recommendation for WETH Uopt on Ethereum v3
Vote Result: Option 3 - 0.9 (No Change)
Rationale
It is important to balance a risk vs. reward perspective and compare the additional revenue earned at 90% and 85% Uopt ($290k and $145k respectively) and the bad debt yielded at both Uopt ($900k and $500k respectively). It is difficult to assume the probability of a rapid, sudden drop in ETH price but given historical volatility and the state of the market, it is important to be measured and protect against it. However, it is also important to prioritise revenue and competitive advantage for Aave compared to only looking at the most conservative risk parameters. There are competitive considerations around other protocols like Spark, Morpho, and Compound, who have a 90% Uopt for WETH - lowering it for Aave would lead to more deposits flowing out of Aave, making the revenue and user loss higher and disadvantaging Aave from a competitive angle. Moreover, on-chain liquidity is not the only liquidity available - liquidators can take aTokens when liquidating. Even if utilisation is 100%, this does not mean that liquidations cannot be processed; in this case liquidators can get aWETH with a bonus and earn at a high rate (while 100% utilisation lasts). Moreso, the Uopt can be lowered when price drops are observed - this should be done by the Risk Stewards when data indicates the possibility of a crash.
Therefore, we will vote YES in favour of Option 3 - 0.9 (No Change).
Chaos Labs Risk Parameter Updates - Aave V3 Ethereum
Vote Result: YES
Rationale
Given that there will be a projected borrow increase of $2.5M with no increase in VaR and EVaR as a result of these parameter changes, we are in favour and will vote YES for this proposal.
[ARFC] - Chaos Labs Risk Parameter Updates - Aave V3 Avalanche - 2023.09.06
Vote Result: YES
Rationale
Given that there will be a projected borrow increase of $26k with no increase in VaR and EVaR as a result of these parameter changes, we are in favour and will vote YES for this proposal.
[ARFC] Gauntlet Interest Rate Recommendation for WETH
Vote Result: Option 1
Rationale
At the moment, it would be better for the interest rate around utilisation to be closer to the staking yield. Reducing the base to 0 ensured that the rate is 3.8% now. Current staking yields, as can be seen on ETH Saver, are 3.73% for stETH, 3.19% for cbETH, and 3.38% for rETH. Having the borrow rate > staking yields discourages the recursive borrowing strategy. If staking yields increase, the borrow rate of 3.3% may be too low. However, yields have been going down over the last few months, as can be seen in this Dune dashboard. So if yields increase, there should be enough notice for the community to adjust the borrow rate back up even given governance lag.
Therefore, we will vote YES in favour of reducing the borrow rate to 3.3%.
[ARFC] - Chaos Labs Risk Parameter Updates - Aave V3 Avalanche - 2023.09.06
Vote Result: YES
Rationale
Given that there will be a projected borrow increase of $26k with no increase in VaR and EVaR as a result of these parameter changes, we are in favour and will vote YES for this proposal.
Gauntlet Recommendation to set MAI & MIMATIC Isolated Debt Ceiling to 0 for Arbitrum, Avalanche, Polygon, Optimism v3
Vote Result: YES
Rationale
De-risking the MAI and MIMATIC markets as much as possible is sensible. Following the success of AIP-318, we will vote YES in favour of this proposal as well.