LlamaRisk - Monthly Community Update
May 2025
Overview
LlamaRisk presents our May 2025 monthly update, summarizing key activities and outlining upcoming priorities.
Highlights
Recommendations and inputs
Asset onboarding
- [ARFC] Onboard frxUSD and sfrxUSD to Aave v3 on Sonic Instance - Did not recommend onboarding due to missing recent audits, absence of a bug bounty program, lack of transparency in sfrxUSD’s yield allocation, among other concerns.
- [ARFC] Onboard eUSDe August expiry PT tokens on Aave V3 Core Instance - Supported onboarding given the relatively long maturity horizon, which justifies integration effort.
- [ARFC] Add PEPE to Aave V3 - Assessed the asset as onboardable with conservative parameters, while highlighting key reputational and strategic considerations for the DAO.
- [ARFC] Onboard osGNO to Aave v3 Gnosis Instance - Recommended onboarding with noted concerns around concentrated DEX liquidity, inactive bug bounty, and lack of timelock on upgrades.
- [ARFC] Onboard USDe July expiry PT tokens on Aave V3 Core Instance - Supported onboarding given the relatively long maturity horizon and sustained yield incentives from Ethena’s ongoing points program.
- [ARFC] Onboard eBTC on Aave v3 Base Instance with CbBTC Liquid E-Mode - Did not recommend onboarding due to severely low eBTC liquidity on Base.
New chain
- [ARFC] Deploy Aave v3 on Tron - Supported deployment with asset recommendations and successfully advocated for an increased bug bounty payout following discussions with the TRON team.
GHO related
- [ARFC] GHO Cross-chain Parameter Adjustments - Supported the proposal to raise the GHO CCIP rate limit on Base, noting it poses no immediate risks to GHO’s secondary market peg.
E-modes
- [ARFC ADDENDUM] Modify E-Modes for PT Token Collateral - Supported adding dedicated E-Modes for PT tokens and their underlying assets to enhance yield-leveraging utility without altering risk, while aiding smoother maturity migrations.
Umbrella
- [ARFC] Aave Umbrella - activation - Recommended minor optimizations to USDC and USDT target liquidity using our Umbrella Methodology while supporting the proposed initial parameters.
Legal commentary
- LlamaRisk’s Insights: Tokenised RWAs—Legal-Risk Cartography - Provided a comprehensive doctrine-and-practice mapping for DeFi protocols in the EU, the US, and Singapore.
Misc.
- [ARFC] Asset Parameters Optimization - Supported reserve factor and optimal utilization updates, noting their impact on CRV borrow rates and recommending a
Slope1reduction to offset sharp borrow rate increases. - [Direct-to-AIP] Aave <> Chainlink SVR v1 activation. Phase 2 - Proposed USDC as a new SVR asset on Prime, while supporting BTC-correlated assets on Core and ETH-correlated assets on Prime for SVR inclusion.
Research and analysis
- LlamaRisk Insights: aUSDC/aUSDT as USDe Backing Assets - Reviewed the implications for Aave of Ethena’s newly approved plan to use aUSDC and aUSDT as collateral backing for USDe.
Community engagement
- LlamaRisk’s Aave SVR Dashboard - Deployed a dashboard to monitor and analyze the performance of Chainlink’s SVR mechanism within Aave on various financial and technical metrics.
- Newsletter: This Week in Aave - Continued delivering weekly roundups of Aave governance updates while enhancing content with deeper insights for stakeholders and users.
Upcoming Focus Areas
- Working on technical improvements to the initial version of our Umbrella Methodology.
- LlamaRisk Risk Metrics Dashboard - Advancing to Phase 2, which expands coverage with deeper assessments of currently listed assets (live on Aave) across additional risk dimensions, while onboarding new assets.
We welcome community feedback and suggestions. Please share any questions, ideas, or areas where you would like increased focus from the LlamaRisk team.