[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 Labsā 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 Aaveās 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.
1 Like
Interest Rate Curve Changes for Aave V2 ETH
Vote Result: YES
Rationale
Given that this is the on-chain vote for this Snapshot proposal that we voted YES for and that the logic for increasing the variable rate to keep the stable borrowing rates above the variable borrowing rates at all levels of utilization makes sense, we will vote YES in favour of this proposal as well.
1 Like
Add cbETH to Aave V3 Ethereum
Vote Result: YES
Rationale
We voted to onboard cbETH onto Aave Ethereum v3 in the temperature check Snapshot, and our rationale remains the same as to the merits of cbETH. With regards to risk, the parameters are very conservative and risk is capped by the borrow and supply caps as well. The analysis to reduce risk is sensible, since there is no data about how users respond to changes in interest rates for borrowing stETH and cbETH is similar to stETH.
The implementation is without e-mode enabled, which reduces risk until there is more data to analyse, as with wstETH and rETH. Moreover, the interest rate curve matches that of the more volatile assets on Aave (1INCH, CRV, ENS, LINK, MKR, UNI), and it can be argued that this is too conservative, although this is necessary since cbETH has never previously been listed as an asset on Aave.
All in all, we will vote YES for this proposal to onboard cbETH to Aave.
1 Like
Aave v3 Polygon wMATIC Interest Rate Update
Vote Result: YES
Rationale
Given that this is the on-chain vote for this Snapshot vote that we voted YES for, and post the Snapshot vote, there has been no change - Chaos Labs has reconfirmed the Supply and Borrow Caps for wMATIC and the payload has been approved by BGD Labs. Therefore, we will vote YES for this proposal as well.
[ARFC] LDO Emission_Admin for Ethereum, Arbitrum and Optimism v3
Vote Result: YES
Rationale
This proposal aims to incentivise liquidity in Aave V3 on Ethereum, Arbitrum, and Optimism, and does not bear considerable associated risks. The role has already been assigned in Nov-22 to Lido DAO for the Polygon V3 Liquidity pool, and no significant risk seems to exist since the Emission_Admin role has the specific, limited functionality of distributing rewards across specific approved addresses. Therefore, we will support this proposal with a YES vote.
BAL Interest Rate Curve Upgrades
Vote Result: ABSTAIN
Rationale
Given that we abstained in the Snapshot vote for this proposal since there was no detailed risk analysis done for this proposal, we have decided to ABSTAIN for this on-chain vote as well. Llama and Gauntlet are not aligned on the appropriate parameter for Slope1, as can be seen in the forum discussion. Since the rest of the community has voted in favour of this proposal and we were not clear about the recommendation from Aaveās risk providers, we felt it would be prudent to abstain from voting in this proposal altogether.
[ARFC] Add USDT to Ethereum V3 Market
Vote Result: YES
Rationale
USDT is one of the most prominent stablecoins across DeFi and should be listed on Aave v3 Ethereum with the appropriate risk controls in place. Given that Chaos Labs supports the addition of USDT with the proposed parameters, especially when risk is mitigated given that it is not used as collateral, and other key contributors like Llama and ACI also support adding USDT to Aave v3 Ethereum, with ACI having proposed this in the first place, it is sensible to add USDT. While there have been concerns over USDTās solvency since it is a centralised stablecoin which has had a lot of attention on it, it has responded well to crises and demonstrated solvency when there have been a lot of withdrawals made in a short period of time.
Given the above, we will vote YES in favour of this proposal.
[ARFC] Add wstETH to Arbitrum Aave v3
Vote Result: YES - with Ethereum eMode
Rationale
As we have done with the previous proposals for adding wstETH as collateral, we will support this new one for Aave V3 on Arbitrum, since we believe it will have the same positive effect of increased borrowing demand for the protocol and will carry no major risks. This time, given BGD Labsā proposal for adding two new Chainlink feeds, we will vote YES - with Ethereum eMode.
[ARFC] CRV Interest Rate Curve Upgrade
Vote Result: YES
Rationale
The adjustment in parameters in the proposal is a reasonable reaction in the interest of Aave in the face of an increasing amount of borrowing activities of CRV driven by veTokenomics. Since the parameter changes have been updated based on Gauntletās recommendations and there has been a lot of discussion in the forum post around the specific parameters to be implemented that has been answered, we are supportive of the proposed parameters and will vote YES on this proposal.
[Temp Check] Deploy Aave V3 on Neon EVM Devnet
Vote Result: NO
Rationale
Neon EVM is a new chain running on Solana, a non-native ecosystem to Aave, which would have the benefits of deploying Aave v3 on other chains and expanding Aaveās influence with minimal additional engineering work. Moreover, the oracle infrastructure is ready on Solana which supports the core functionality of Aave v3, which would aid in an easier deployment. Aave v3 also has borrow and supply caps and isolation mode enabled, which would lessen the risk of deployment on Neon.
However, the below points make deploying on Neon infeasible for Aave:
- Neon is new and untested. As a blue-chip protocol, Aave should only deploy on battle-tested chains with recurring users. Neon does not fit that criteria and can incur material risk for Aave and its reputation.
- Solana has seen a precipitous decline in TVL and DeFi activity following the uncovering of Macalinao brothers scheme + FTX collapse (and ties with Serum and other projects in that ecosystem). It currently sits at $260m TVL, which is not a large enough prize for Aave to capture at the moment.
- Solana has had issues with downtime in the past. Itās also a highly centralised chain given the high hardware requirements of running a node. Only one full archive node exists for the chain.
- The low liquidity may compromise Aaveās ability to remain solvent in the event of forced liquidations.
In conclusion, given the above, we believe Neon should be given time to develop and if there is increased usage and liquidity on the chain and no downtime on Solana over an extended period, we can revisit the proposal to deploy Aave v3 on Neon. Therefore, for the moment, our vote is NO for this proposal.
Add USDT to Aave Ethereum V3 Pool
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal we voted YES for. Gauntlet has not proposed any parameter changes to the original recommendations. Therefore, we will vote YES for this proposal as well.
Add rETH to Aave Ethereum V3 Pool
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot proposal we voted YES for. There are no proposed parameter changes and the Snapshot passed with e-mode disabled, which has been reflected in this proposal. Therefore, we will vote YES for this proposal as well.
[ARFC] Increase Borrow Cap for MAI Aave Polygon V3
Vote Result: YES
Rationale
The recommendation of Chaos Labs makes more sense than what is originally proposed. The original (UOptimal+0.1)supply cap yields an aggressive borrow cap in cases the UOptimal is high (90% as suggested). 0.55supply cap is a more reasonable amount for borrow cap and is more balanced between risks and return, especially given MAIās profile and being listed in isolation mode. Therefore, we will vote YES in favour of this proposal.