Phase I Summary - karpatkey & TokenLogic


Service Provider: @karpatkey and @TokenLogic
Duration: 6 months from 29/12/2023 to 18/06/2024
karpatkey Stream: 220k GHO
TokenLogic Stream: 180k GHO
Total Cost: 400k GHO


Summary

This publication outlines the contributions of @karpatkey & @TokenLogic to the Aave DAO during Phase I of the service provider engagement.

Motivation

With Phase I coming to an end, this publication highlights the contributions of both karpatkey and TokenLogic, while demonstrating our commitment to advancing the DAO’s goals and ensuring transparency within the Aave community

Upon reviewing this post, the reader can evaluate the combined impact of the Phase I knowing a Phase II proposal will be shared on the forum in the near future.

Overview

The Aave DAO in December 2023 voted to engage karpatkey and TokenLogic to provide the following services to the Aave DAO:

  • Treasury Management;
  • Strategic Assets’ Liquidity; and
  • Safety Module.
Governance Proposals

Treasury Management

Develop the Architecture for Managing Aave’s Assets

Continuing with Aave’s preference for creating role-based permissions to enable service providers to streamline operations, the Aave Finance Steward Role was developed to significantly reduce governance overhead.

The Finance Steward role combined with the Aave Swapper and Bridging contracts will enable the DAO to perform the following without an AIP:

  • Manage Composition Assets held in Treasury;
  • Transfer Assets between Networks;
  • Creates Allowances & Streams; and,
  • Migrate Assets from v2 to v3 instances of Aave Protocol.

Later instances of the protocol v4, will automate the task of rebalancing the asset composition within DAO treasury in a more Trustless manner. v4 represents the opportunity to bring primary asset management features into the core of the protocol.

Governance Proposal

[ARFC] Aave Finance Steward

Financial Security

Financial planning has been another focus area, ensuring Aave DAO is able to meet its obligations and count with certain fund availability. The below mentions some of the key achievements from Phase I:

  • Bridged funds from Polygon, Arbitrum, and Optimism to Ethereum;
  • Migrated funds on Polygon, Ethereum, and Avalanche from v2 markets to the respective v3 deployments;
  • Facilitate funding of Security Bounties, Merit, Frontier, ALC, AGD and GSMs;
  • Rebalance Asset Holdings to reflect the DAO needs
  • Commence Sun-setting USDC.e
  • Continue Sun-setting Polygon, Avalanche, and Ethereum v2 deployments
  • Support the implementation of Merit and Frontier programs led by the @ACI team
  • Support enabling teams to distribute rewards on Aave v3
  • Provide Monthly Treasury Reports
  • Provide detailed insights into the DAO’s Revenue and Runway
  • Script to identify unclaimed fees with AaveParaswapFeeClaimer across all chains.

Several v2 markets and USDC.e are being actively managed to encourage users to migrate to the more capital efficient v3 deployment or into the native USDC asset.

Governance Proposal

Strategic Assets’ Liquidity

One of the main aspects of the Aave Financial Service Providers’ mandate has been to improve the value proposition of GHO and its ecosystem. The primary focus areas are highlighted below:

  • Improve the price;
  • Reduce price volatility;
  • Improve Swapping UX by reducing price impact;
  • Support creating utility.

Over the last 6 months, stability and peg of GHO’s price have improved, the GSM has been funded and we have witnessed significant growth with supply exceeding 85M. The success of GHO is a team effort, with the Merit Program and stkGHO being monumental to helping achieve and retain the peg. For insights into the historical performance of GHO, check out the Aave Portal.

The following contains some of our contributions to the success of GHO:

Governance Proposal

Safety Module

During Phase I, AAVE emissions across the various SM categories were redistributed in favor of stkGHO to help GHO recover the peg.

More recently, a proposal was approved that supports transitioning from AAVE to GHO rewards for the stkGHO category and further diversification of the SM with the introduction of GHO/USDC ECLP whilst also helping sustain GHO liquidity.

With @bgdlabs soon upgrading the SM to enable multiple token emissions, the transition from AAVE to GHO rewards on the stkGHO category will be implemented by @bgdlabs as part of the broader upgrade.

Adding the GHO/USDC ECLP position to the SM is currently under technical review by the @bgdlabs team. Upon completing the review of all associated contracts, the new category with GHO rewards will be submitted to AIP for implementation.

Governance Proposal

Next Steps

Thank you for taking the time to read the post. We look forward to addressing any questions below in the comments and sharing our Phase II Service Provider proposal in due course.

Copyright

Copyright and related rights waived via CC0.

6 Likes

Great work from TokenLogic and Karpertkey!

Looking forward to more contributions going forward.

3 Likes

The work carried out by karpatkey & TokenLogic during Phase 1 was outstanding.

We are looking forward to the renewal of the contract.