Gauntlet <> Aave Renewal
Vote Result: YES
Rationale
Since this is the on-chain vote for this proposal which we have already voted in favour of, we are voting YES in favour of this proposal to renew Gauntlet as well.
1 Like
Authorise the release of Aave <> Chainlink Proof of Reserve for Aave Avalanche
Vote Result: YES
Rationale
PoR should provide additional risk controls by increasing the scope of collateral monitoring across chains. Moreover, in this case, contracts are implemented on Avalanche as a test case, isolating risk to contracts deployed on Ethereum. The contracts have also undergone technical audit and are ready to be deployed. The one concern would be that this mechanism relies on external oracle feeds which are subject to centralisation risk / single point of failure. However, Chainlink is the leading company for oracle feeds and their PoR feeds are widely used in the DeFi space. While this does not mitigate the risk completely, it is a vote of confidence for the safety and security of Chainlink. Therefore, we are voting YES in favour of this proposal.
Rewards controller update across V3 pools
Vote Result: YES
Rationale
Approving these minor upgrades to the Aave v3 periphery contracts, which we understand include bug fixes and other optimisations. The code has been peer reviewed and tested by BGD Labs.
[ARFC] Aave v3 Polygon wMATIC Interest Rate Update
Vote Result: YES
Rationale
Increasing utilisation of wMATIC will increase revenue for Aave, and the strategy itself is straightforward in lowering rates against staking yield to incentivise borrowing from Aave v3 Polygonâs liquidity pool. Moreover, the methodologies presented by Chaos Labs to adjust first the SupplyCap of wMATIC on v3 and consequently the BorrowCap seem appropriate. The huge increase in SupplyCap is sensible since Liquidity Mining is due to begin which will stimulate demand and the new SupplyCap of 47M accounts for the new deposits and leaves space for all the wMATIC on v2 to migrate across.
It is important to note Gauntletâs concern that the proposed interest rate at the optimal point is lower than the current APR of stMATIC (6.3%) on Lido, which will lead to lending pool utilization above the optimal point and can lead to more volatile interest rates and increase the risk of failed atomic liquidations. However, since there is a discrepancy between Lido, Stader and Polygon Foundationâs front end on the stMATIC APR, the proposed APR of 6.1% is higher than the APR reported by Stader and Polygon Foundation and seems correct to use.
Therefore, we are voting YES in favour of this proposal.
1 Like
[ARFC] BAL Interest Rate Curve Upgrade
Vote Result: ABSTAIN
Rationale
Pending comments from Gauntlet and Chaos we donât see enough reason to approve this vote. The short term increase in revenue is not worth the additional risk of attack, particularly as Aura Finance incentives are impermanent and likely to reverse.
Update renFIL rate strategy on Aave v2 Ethereum
Vote Result: YES
Rationale
In light of the current situation in which renFIL minting has been halted, burning is about to follow suit, and liquidity of renFIL will become non existent on Ethereum, impeding renFIL loans repayment and liquidations, it follows that incentives to stop accumulating the token on Aave V2 should be set. Hence, we will accompany the proposal and vote yes to its approval.
Supply/Borrow Cap Updates for Aave v3
Vote Result: YES
Rationale
This is the on-chain vote for the following proposals that we voted YES for: [ARC] V3 Supply Cap Recommendations for Uncapped Assets (Fast-track) and V3 Borrow Cap Recommendations (Fast-track). Therefore, we are voting YES in favour of this proposal as well.
1 Like
Risk Parameter Updates for Aave v2 Ethereum - LT and LTV (DAI, USDC)
Vote Result: YES
Rationale
This is the on-chain vote for the following proposals that we voted YES for: Risk Parameter Updates for Aave v2 Ethereum (DAI LT and LTV) and Risk Parameter Updates for Aave v2 Ethereum (USDC LT and LTV). Therefore, we are voting YES in favour of this proposal as well.
1 Like
Risk Parameter Updates for Aave v2 Ethereum - LTs and LTVs for Long Tail Assets
Vote Result: YES
Rationale
This is the on-chain vote for the following proposal that we voted YES for: Risk Parameter Updates for Aave v2 Ethereum - LTs and LTVs for Long Tail Assets. Therefore, we are voting YES in favour of this proposal as well.
1 Like
Chaos Labs - Aave v2 Coverage
Vote Result: YES
Rationale
Given recent and ongoing market events and events within Aave (CRV attack and the continuing discussions around Gauntletâs renewal), Chaos have been very helpful in conducting risk-mitigation analysis on v2 which falls outside of their scope. The scope proposed here seems appropriate to meet Aaveâs needs and is necessary to formalise Chaosâ support over the next few months.
Having discussed this proposal with Chaos, they have confirmed that their primary goal is to help migrate usage and volume over to v3 as quickly and efficiently as possible. They have intentionally proposed a shorter timeframe for this engagement since this is a necessary focus rather than an ongoing engagement, which is sensible. Chaos have also confirmed that they will be looking at both incentivising the move from v2 to v3 and actively managing the risk on v2 markets. The fee of $50k per month for 5 months also seems fair and in line with the proposed scope.
Therefore, we are in favour of this proposal by Chaos and would welcome feedback from other Aave participants as well to see if our analysis has missed any critical points.
1 Like
[ARC] Risk Parameter Updates for Aave V3 Optimism 2022-12-29
Vote Result: NO
Rationale
While Gauntletâs proactivity in proposing the addition of a Supply Cap to AAVE on v3 Optimism is noted, given the lack of alignment between Gauntlet and Chaos as highlighted in the comments and the differing risk methodologies and assumptions, there is no option but to vote NO on this proposal due to the lack of clarity for the Aave community.
It is indeed true that there is no supply cap for AAVE on Optimism and given liquidity conditions, this would expose Aave to bad debt. However, Gauntletâs Supply Cap recommendation rests on the assumption that there is enough liquidity + incentive on DEXs outside of Optimism to liquidate AAVE without bad debt, but this may not be the case and risks exposing Aave to bad debt.
Even so, Chaosâ recommendation also does not make complete sense since there is no obvious solution for closing the 79k position on Optimism, and their recommendation rests on this assumption.
It is very clear that more analysis and collaboration between Gauntlet and Chaos is needed. This current way of working is not feasible since both teams are not in sync with each other and proposals are getting posted when there are clearly differences of opinion between Gauntlet and Chaos. The community is likely to suffer because of this since there is no clarity on the correct path forward.
Therefore, we are voting NO on this proposal and would request the Gauntlet and Chaos teams to work more closely and collaboratively going forward.
3 Likes
Chaos Labs Aave v2 Coverage
Vote Result: YES
Rationale
This is the on-chain vote for this proposal that we already voted YES for. Therefore we are voting YES for this proposal as well.
Approve Pricing Approach for wBTC on Aave
Vote Result: YES
Rationale
wBTC is a centralised wrapper on BTC and carries inherent counterparty and liquidity risks, meaning it necessarily trades at a discount to BTC. The amount of that discount is best estimated by the price differential between wBTC and BTC - which is determined by market participants. Moving to a wBTC feed allows Aaveâs liquidation engine to automatically respond to changes in market conditions, without the need for delegates to step in and implement emergency measures (which may be too late). Gauntlet already uses wBTC liquidity as part of their risk parameter recommendations so adopting the new feed is more internally consistent.
A potential issue is that switching to a wBTC price increases the risk of price oracle manipulation against Chainlinkâs feed. However, this is mitigated by its layered price aggregation strategy and other safeguards.
Given the above, we have decided to vote YES for this proposal.
Aave Grants DAO Renewal Approval
Vote Result: YES
Rationale
The community discussion around the budget for Season 4 of the Aave Grants DAO has been long and extensive, and the updated proposal by the AGD team has incorporated a lot of feedback across multiple stakeholders, including the Aave Chan Initiative, eboado from BGD Labs, and other key stakeholders. We have noted how the AGD team has responded to every question with a lot of depth.
There is clearly a need for events and sponsorship, given the imminent launch of GHO, and the budget allocated to this seems to be appropriate. There has also been a lot of scrutiny to the exact events sponsored by the AGD, and the updated proposal has cut out sponsoring Consensus since it does not align with Aaveâs goals. They have also given a detailed methodology of how Aave chooses the events to sponsor, which seems detailed enough under scrutiny.
Moreso, given the past success stories and how previous grant recipients like Chaos Labs and Llama have evolved to become important full-time contributors to Aave, the grants program is very important and must be prioritised, especially when there are multiple apps that can be built on top of GHO when it releases.
Overall, the updated proposal from the AGD team seems appropriate and well-scrutinised by the rest of the community, and we will therefore vote YES for this proposal.
Add OP to Aave V3 on Optimism
Vote Result: YES
Rationale
Optimism is an important part of the Ethereum ecosystem and its integration with Aave is beneficial for both Aave and Optimism. OP is a growing L2 solution that released its token this year. It already has Aave v3 pools, and this proposal would increase their use and liquidity. The risk of listing OP on v3 has been assessed carefully by Gauntlet and the proposed parameters are in line with their recommendations. Aave v3âs features of supply and borrow caps and isolation mode will help mitigate risk from initial deployment, while conservative parameters have been used initially that can be adjusted upwards, which again helps in managing risk. Additionally, BGD and Certora have reviewed the proposal and found no technical problems with it. Lastly, the issues with the original vote which was rejected have been resolved and Gauntletâs risk analysis is combined with the correct process being followed this time.
Therefore, we are voting YES in favour of this proposal.
[ARC] Aave Ethereum V3 Market Initial Onboarded Assets
Vote Result: YES
Rationale
Given current market conditions, it would be more prudent to go with a safer launch for Aave v3 Ethereum as outlined by Chaos Labs, rather than the more expanded selection by Gauntlet. Chaos has also selected assets representing a significant portion of the protocolâs usage (and, therefore, revenue). Chaosâ logic for the safer launch is more clearly expanded upon in the goals they have highlighted that they are driving towards, and adjusting risk upwards rather than downwards is safer in these market conditions. Further, as highlighted by ACI, it is not economically viable to onboard long-tail assets anymore and we can start with a smaller, cleaner slate on v3 and ramp up when appropriate. All in all, we feel as if Chaosâ methodology is more detailed and clearer than Gauntletâs and they have presented a clear plan for incentivising migration from v2 to v3 while outlining their efforts to de-risk Aave in general.
Therefore, we have voted for Chaos Labsâ proposal while acknowledging the merits and logic behind Gauntletâs as well.
Enable Search by UNS + ENS Domains
Vote Result: NO
Rationale
We were not able to complete our vote on this since Snapshot did not work correctly. However, we would have voted NO since there is no forum post provided and the correct process has not been followed, even if the change is minor and only impacts the UI/UX. Therefore, we would have voted NO on this proposal and would encourage the authors to follow the correct process, post which we will be happy to judge the proposal on its own merits.
[ARC] Interest Rate Curve Changes for Aave V2 ETH
Vote Result: YES
Rationale
The analysis done by Gauntlet is comprehensive and proactive. Lowering the optimal utilisation from 0.9 to 0.8 for USDT is sensible, since it would allow suppliers to withdraw their tokens if utilisation spikes. Moreover, increasing Slope 2 would allow quicker returns to the optimal point. Given the high utilisation of USDT, there may be a lot of short interest, and making this proactive move to protect Aave seems to be the correct one. The analysis on TUSD also makes sense, especially identifying that it experiences higher than normal delays in returning to optimal utilisation, and making recursive borrowing profitable by reducing the reserve factor when utilisation has been increasing is beneficial for Aave.
Therefore, we are voting YES in favour of this proposal.
1 Like
Freeze agEUR & jEUR on Aave v3 Polygon
Vote Result: YES for freezing jEUR, NO for freezing agEUR
Rationale
Freezing jEUR makes sense and all parties agree with it. Pascal from Jarvis also makes the point that there is no yield on jEUR yet on Polygon, so there is little incentive to hold it, and limiting risk is sensible. For agEUR, however, there is a split opinion with Chaos Labs being extremely risk averse and Gauntlet and ACI making the point that looking at agEUR from a risk-reward perspective, the impacted amount only represents 0.1% of the total agEUR supply and 0.5% of Angle Protocol revenue, and is overcollateralised. Therefore, freezing this asset would not be the correct decision in terms of the risk it presents to Aave.
Hence, we are voting YES in favour of freezing jEUR and NO against freezing agEUR.
Ethereum v2 Collector Contract Consolidation
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal that we already voted YES for. Therefore, we will vote YES for this proposal as well.