LBS Blockchain Society Delegate Platform

[ARC] Compensate Bug Bounty Contributor

Vote Result: Pay 20 AAVE Tokens

Rationale

Gauntlet has proposed to reward 20 AAVE tokens to an individual (address 0xF7D9c506968bFb273eF1e9183d1A94d5a7Fe9371) who reached out to Aave via the security email box indicating risk on REN. Rewarding this individual for acting in the correct manner and reaching out to Aave via the security email box would indicate to further contributors that there is a clear benefit to contributing to the overall security of Aave. Moreover, not rewarding contributors or having too low a bounty can be counterproductive and incentivise contributors to do the opposite and not reach out via the standard route.

It is important to keep in mind that 20 AAVE at the moment is ~$1,650 which may set a precedent over time for these bug bounties which may be too high. Even though comparing it to the all-time high price of Aave is not the best approach, at the Aave ATH the bounty would be worth $11k which is too high. Therefore, we must take care to index the reward to dollar amounts rather than only Aave tokens.

Overall, we will vote YES in favour of this proposal.

1 Like

Renew Aave Grants DAO

Vote Result: YES

Rationale

This is the on-chain vote for this Snapshot proposal that we voted in favour of, and we will therefore be voting YES in favour of this proposal as well.

Repay Excess CRV Debt on Ethereum v2

Vote Result: YES

Rationale

This proposal follows an earlier approved proposal to recapitalise the CRV bad debt on Ethereum v2 using protocol USDC and aUSDC holdings. Following the passage of the last vote, the CRV/USD market price has risen, moving against our position and increasing the cost of clearing the debt position from $2 million to $3.1 million.

We recognise that preparing the contract payload for executing this swap takes time, particularly in light of the holiday period. However, the 1 month delay is imprudent in our view. Market prices are volatile and we would advise Llama to take more urgent measures to implement time-sensitive proposals, particularly where the expectation of this purchase could open us to frontrunning in the open market.

We support passing this vote to close the bad debt as soon as possible and prevent a further widening of the insolvency gap should CRV prices continue to increase relative to USD. In our view the intentions of the governance community to close the insolvency gap using USDC holdings has not changed, so this decision best reflects the intentions of the original vote.

Aave Ethereum V3

Vote Result: YES

Rationale

There is an imminent need to introduce Aave v3 Ethereum due to the much broader benefits of v3. Given that the security audits have all been completed successfully and been tested on the Aave interface as well, and there have been several lengthy discussions on the initial assets to be included, with Chaos Labs’ recommendation recently passing, there is no need to further delay the release. While the interest rate models used will follow those on v2 Ethereum assets and other instances of v3 and have not been made bespoke for v3 Ethereum, this is not a blocker, and it is to be noted that if need be, these parameters should be updated by the risk teams going forwards.

All in all, we will vote YES in favour of this proposal.

[ARFC] CRV Interest Rate Curve Upgrade

Vote Result: YES

Rationale

We support this proposal to optimise the Aave v3 CRV pool on Polygon and increase revenues from the pool. Supply of CRV to the pool has reached the cap of 100%, with a utilisation of 45% at currently levels of borrowing demand. This is a proposal to raise the supply cap to allow more organic borrowing revenues and increase protocol fees.

We note that Gauntlet has not yet had a chance to weigh in on these parameter changes, but that they intend to do so in the near future. Given the parameter changes are not overly controversial, we support approving these changes first and updating later should further analysis from Gauntlet show this to be necessary.

[ARFC] wETH Interest Rate Curve - Ethereum v2

Vote Result: YES

Rationale

This proposal aims to amend wETH and wstETH interest rate parameters on Aave v2 and v3. In our opinion, this proposal is a proactive one which has assessed the wETH parameters on Aave v2 and proposes to change Slope1 from 5.75% to 4.8% to be able to more efficiently run the wETH recursive strategy. The rationale for all parameter changes has been made clear, including the base fee (to flatten the interest rate curve and smoothen recursive borrowing), Slope1, Slope2, Reserve Factor, etc. Since the parameters are sound and can be adjusted following further analysis from both Chaos and Gauntlet, setting these parameters at the moment makes sense. The modifications compared with the current wETH rate strategy on v2 are not too aggressive, moreover, and can be monitored carefully in case any changes are required.

The logic to implement the same Interest Rate curve on v3 as on v2 makes sense, especially with the intention of migrating liquidity from v2 to v3. Moreso, introducing an interest rate curve for wstETH on Aave is necessary, and this proposal achieves that. Lastly, Llama, ACI, BGD Labs, and Chaos Labs are all in favour of this proposal which has been reviewed by Gauntlet, post which changes have been made to the initial proposal.

Given all of the above, we are voting YES in favour of this proposal.

[ARC] Onboard rETH (Rocket Pool ETH) to Aave V3 Ethereum Market

Vote Result: YES (without e-mode)

Rationale

Since rETH has similar properties as stETH, it is reasonable that adding rETH to Aave’s reserve will help replicate the success of stETH and generate additional benefits to Aave. The benefits of adding rETH include additional revenue generation, ecosystem diversification and risk avoidance. The choice of adding rETH is of low risk given that rETH is widely circulated, with its liquidity second only to stETH. The reason for voting with e-mode is that rETH possess characteristics similar to those of wstETH, which makes it qualify the criteria of entering e-mode. Even though adding rETH with e-mode makes the asset more attractive to the market and can increase the potential liquidity for the asset and revenue for Aave, at the moment, we can get more representative data by not adding rETH to eMode immediately and add it following the Shanghai upgrade. Chaos and Gauntlet support the decision to not add rETH to e-mode at the moment, while BGD has highlighted technical difficulties with adding the asset to e-mode immediately.

All in all, we support the proposal of adding rETH to Aave v3 Ethereum, but without e-mode enabled at the moment.

[ARFC] Add wstETH to Optimism Aave v3

Vote Result: YES (without e-mode)

Rationale

Lido DAO has proposed enabling wstETH as collateral on Aave v3 on Optimism. In line with the scaling of L2s, we believe the inclusion of wstETH on Optimism provides a platform for increased wETH borrowing demand while new use cases are developed. This will generate increased revenues for the protocol, as did the addition of stETH on Aave V2 on Ethereum.

The risk parameters jointly proposed by Gauntlet and Llama are conservative enough to minimise risks while the market and liquidity grow. However, regarding eMode, the price for wstETH currently cannot be composed in a similar fashion to the Ethereum pool as there is no stETH/ETH price feed on Optimism. BGD has also indicated that there is additional complexity in tracking the wstETH/wETH position from the price sync adapter. Therefore, we will vote YES for this proposal but without eMode enabled at the moment, until there is a safer way to enable e-mode for wstETH on Optimism.