Supply Cap Update sAVAX Avalanche V3
Vote Result: YES
Rationale
Increasing the supply cap of sAVAX by 100% is still reasonable as its liquidity risk will remain under control given the current market swap rate. Given that the supply cap has already been reached and raising the supply cap will increase the potential profitability on sAVAX for Aave, we will vote YES in favour of this proposal.
[Temp Check] Deploy Aave v3 on Scroll Testnet
Vote Result: YES
Rationale
Deploying Aave on Scroll testnet provides an opportunity for Aave to engage in the zk-rollup ecosystem and allows it to further explore potential opportunities in this realm. Although Scroll is still in its embryo stage and the deployment does not provide immediate returns, the low cost of deployment due to EVM-equivalence makes it an attractive proposition, as is also suggested by the ACI. Therefore, we will vote YES in favour of this proposal.
[ARC] Gauntlet Risk Parameter Updates for Avalanche Aave V3 (2023-02-16)
Vote Result: YES
Rationale
Gauntletâs analysis shows that reducing the liquidation bonus increases capital efficiency without incurring additional insolvency risk. This change improves usability for users since they want a lower liquidation bonus), while not adding outsized risk since simulations show that this reduction in LB does not increase VaR. Therefore, we will vote YES in favour of this proposal.
[ARFC] Aave V3 Caps Update Framework
Vote Result: YES
Rationale
The current voting process adds undue delay to risk parameter changes that are often already agreed between risk service providers. Delays can reduce the efficiency of the governance process and Aaveâs ability to adapt to changing market conditions. We support this proposal to bypass the Snapshot vote where it is supported by a risk service provider. The suggested configuration prevents large changes from being pushed through while giving risk managers more flexibility to implement suggested parameter updates.
[ARC] Gauntlet Interest Rate Curve Recommendations for Aave V3 Markets (Feb 2023)
Vote Result: YES
Rationale
Gauntletâs proactivity in adjusting interest rate parameters and reserve factors has the aim of mitigating tokenâs 100% utilisation risks and of increasing reserves via protocol revenue. Because it was devised based on assetsâ past usage during different market conditions and we believe it will contribute to both of the objectives it targets without adding significant risks, we support and will vote YES for this proposal.
Chaos Labs Risk Parameter Updates - MKR on Aave V2 Ethereum
Vote Result: YES
Rationale
Chaos Labs have used their Asset Protection Tool to identify the possibility of a long attack on MKR on v2 Ethereum. Decreasing LT and LTV will reduce capital efficiency for MKR and mitigate attack vectors by increasing the capital required to wage a price manipulation attack. Moreso, these changes act as a motivation to shift usage to V3. The LT/LTV are only being decreased by 3% to make sure many user accounts do not get liquidated, and no accounts are eligible for liquidation. Lastly, according to Chaos Labsâ analysis, the impact on revenue is negligible , as the supply is relatively low at $14.3M. Borrow usage ATM is at ~51%, which can be translated to annualised protocol revenue in the 20-thousands. The potential loss in revenue is only hundreds of dollars.
Given the above, we will vote YES in favour of this proposal.
ARC Spark Lend Profit Share Proposal
Vote Result: YES
Rationale
Given that there is no info on how the purchased Aave will be used under Option 2, we recommend Option 1 to make things simple and clear.
Chaos Labs Risk Parameter Updates - Aave V3 Arbitrum - 2023.02.20
Vote Result: YES
Rationale
Chaos Labs have proactively identified opportunities to change the LTV, LT, and LB for WBTC, WETH, USDC, and DAI on v3 Arbitrum, via which Aave can achieve improved capital efficiency with a negligible effect on projected VaR and EVaR. The borrow increase is projected to be ~$510,000. Further adding to the low risk nature of this proposal, Chaos have analysed the impact from any potential whale positions for any of the assets, and concluded that even if borrow usage for the 2 assets with whales on v3 Arbitrum (DAI and USDC) increased significantly and disproportionately, the on-chain liquidity for the assets should support their liquidations and not expose Aave to any bad debt. We will therefore vote YES in support of this proposal.
[ARC]- Chaos Labs Risk Parameter Updates - Aave V3 Ethereum - 2023.02.22
Vote Result: YES
Rationale
By changing the LTV, LT, for USDC and DAI on V3 Ethereum according to the proposal from Chaos Lab, Aave can improve its capital efficiency without creating extra risks associated with accidental liquidation. Therefore, we will vote YES in favour of this proposal.
Rescue Mission Phase 1 Short Executor
Vote Result: YES
Rationale
This rescue mission is a no-brainer and enables people who have sent tokens by mistake to incorrect addresses to recover them. Moreso, this Level 1 proposal for Phase 1 has had its smart contracts audited by Certora, indicating low smart contract risk. Therefore, we will vote YES in favour of this proposal.
Rescue Mission Phase 1 Long Executor
Vote Result: YES
Rationale
Given that this is a Level 2 proposal for this AIP that we voted YES for, we will vote YES for this proposal as well.
MaticX Risk Parameter & Interest Rate Upgrade
Vote Result: YES
Rationale
Given our rationale for the previous vote, combined with the fact that the SupplyCap on MaticX has been reached, it is absolutely necessary to vote YES in favour of this proposal to enable Aave to grow the TVL of MaticX and earn increased revenues from wMATIC from the recursive strategy. Moreover, Gauntletâs supply and borrow cap methodology says that the aggressive supply cap would be 9.615 million, while this AIP raises it to 8.6 million. As such, it can be seen that this proposal is not extremely risky for Aave. Therefore, we will vote YES in favour of this proposal.
[ARFC] Proposal for Deploying âWhitelabelâ Aave V3 Market for RealT Tokens on GnosisChain
Vote Result: YES
Rationale
This proposal is in a similar vein to the recent Spark Lend proposal that we voted in favour of, and aims to share profits with Aave. There is no real risk to Aave, except for reputational risk if RealTâs network on Gnosis Chain fails. However, this would be the case regardless since Aave v3 is open source and the RealT team does not need Aave DAOâs explicit permission to deploy. This proposal will also indirectly increase adoption of Aaveâs technology on Gnosis. Moreover, there is no support expected from service providers to Aave or costs from Aave for this deployment.
Given the above, we will vote YES in favour of this proposal.
Supply and Borrow Cap Updates - Aave V3 Avalanche
Vote Result: Aggressive
Rationale
Following the feedback from Gauntlet, Chaos has revised their proposal to be pretty much identical to Gauntletâs original recommendations. Therefore, Gauntlet is now supportive of the proposal (the aggressive option), so after taking opinions from both Chaos and Gauntlet into consideration, we are in favour of voting for option 1.
Add CRV to Ethereum v3
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot vote that we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
[ARFC] BUSD Offboarding Plan
Vote Result: YES
Rationale
There is no need to have BUSD on Ethereum v2 and offboarding it is the best strategy. Moreover, since current borrowers do not bear much of a cost, it is important to expediently reduce the possibility of reaching 100% utilisation and increasing the cost to borrowers. A consideration is that the likelihood of reaching 100% utilisation when Paxos has stopped minting BUSD is pretty low, and the cost to current borrowers is likely to stay consistent over time. However, it is better to offboard BUSD imminently rather than waiting. Therefore, we will vote YES in favour of this proposal.
Increase Supply Cap for wstETH Aave Arbitrum V3
Vote Result: YES
Rationale
Since the supply cap of Arbitrum has already reached 95%, the increase of the supply cap will enable the market to find a new equilibrium for wstETH supply, while the 100% increase from the current cap is compliant with the âdirect-to-AIPâ framework. Moreso, Chaos Labs and Gauntlet both support the proposal. Therefore, we will vote YES in favour of this proposal.
[ARFC] Activate eMode for cbETH Aave Ethereum V3
Vote Result: YES
Rationale
As cbETH is the second largest ETH Liquid staking derivative in the V3 market, and because it is firmly pegged to the price of ETH with low volatility, adding cbETH to eMode makes AAVE a more attractive protocol for traders to utilize LSDs and cbETH. The risks of adding cbETH are limited. First, the comparatively stable price of cbETH enables it to be accommodated by the 93% LT of the ETH E-Mode category. Secondly, even if liquidation occurs, there will be a small percentage of price slippage, which will not add oversized risk to the protocol. Thirdly, concerning the relationship between wstETH and cbETH, the potentially drastic price divergence between two LSDs can be mitigated by maximizing the utilization of LSD/ETH positions while monitoring and keeping the collateral levels of traders adequate enough. Given the above, we will vote YES in favour of this proposal.
Risk Parameter Updates Aave V3 Arbitrum
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot vote that we voted in favour of according to our rationale posted here. Therefore, we will vote YES in favour of this proposal as well.
Supply & Borrow Cap Updates V3 Arbitrum, Optimism, Polygon
Vote Result: YES
Rationale
This is the on-chain vote for this Snapshot vote that we voted in favour of according to our rationale posted here. Moreover, Chaos has updated its original recommendations and incorporated Gauntletâs recommendations for LINK, WBTC, and AAVE for the assets on Optimism, Arbitrum, and Polygon, with both risk providers being in alignment. Therefore, we will vote YES in favour of this proposal as well.