Proposal: Adapt contracts slightly to improve DeFi composability

Summary

The Enzyme core dev team would like to propose a minor code addition by AAVE to support stkAAVE Liquidity Mining and General Staked AAVE natively on Enzyme.

Aave incentive contracts currently only contain claiming functions in which the caller specifies the recipient to address, who will receive the claimed rewards. Unfortunately, this poses a security problem for abstractly-designed smart contract claimants that do not have fully-trusted originators of claiming txs. This is the case for Enzyme vaults.

By adding an additional claiming function to each incentive contract that uses msg.sender instead of to, the tx originator no longer needs to be trusted.

These simple additions - that can reuse the exact same claiming logic as the current claiming functions and will not require any changes to storage layout - will increase composability opportunities with Enzyme and similarly architected protocols.

Background

Enzyme is a decentralised asset management infrastructure built on Ethereum. It allows asset managers to build on-chain investment Vaults that utilise and allocate to the newest innovations in DeFi. Because all transactions occur on the Ethereum blockchain, compliance, accounting, and investor management services are rendered programatically and at a dramatically-reduced cost to their traditional finance counterparts.

Amongst other things, Enzyme Vaults can interact with AAVE by lending. We are currently also working on accommodating the borrowing functionality to enable leveraged strategies as part of our Sulu release.

In order to keep providing our users with superior asset management tools in DeFi, we want to open up liquidity mining and general staked AAVE option for them as soon as possible. Our users rely on having the latest DeFi functionality in Enzyme to reach their full potential.

Enzyme Growth & Traction

Since our v2 release (end of January) Enzyme has seen very strong growth in Enzyme’s TVL.

TVL has increase by nearly 600% during this period (less than 4 months) to reach about $40m.

This is an outperformance of nearly 400% vs ETH.

High profile managers like The Yang Express, Techemy Capital, Rhino, Apophis and others have had great traction and continue to attract new users.

Use Cases

There are many different use-cases for Enzyme Vaults. These include;

  • Yield farming strategies (eg; utilising our Curve pool integrations)
  • Meta-Yield farming strategies (eg; building strategies around strategies)
  • Long/short Vaults (with the use of our Synthetix adapter)
  • Passive strategies (eg. ETFs or Indices)
  • Robo strategies (eg. using Enzyme SDK)
  • Market Making strategies (eg. leveraging native integrations with Uniswap, Curve, etc)

Proposal

  • Add function claimRewardsToSelf(address[] calldata assets, uint256 amount) to the liquidity mining incentives contract, which reuses the logic of claimRewards() but uses msg.sender instead of to
  • Add function claimRewardsToSelf(uint256 amount) to the staked aave incentives contract, which reuses the logic of claimRewards() but uses msg.sender instead of to

Benefit for AAVE

  • Increased AAVE adoption by the Enzyme user base and other similarly architected protocols
  • Tapping into a new and extremely fast-growing community
  • A closer collaboration between our two projects & communities
  • Enzyme contracts have been audited by PWC, Chain Security and some of the leading auditors in the space who sit on the Enzyme Council
  • Opening up the possibility for new and novel use-cases to be built around AAVE
10 Likes

Great initiative.

I’m in support of this proposal as I think it will benefit the Aave community.

I have been an Aave user from the early days, but equally I’m now a user of Enzyme - I run the aforementioned Apophis portfolio, which has allocations to both $AAVE token and Aave v2 lending. As part of our investment strategies we are looking forward to the ability to leverage via borrowing from Aave. It would be of a great help if our depositors were able to get stAAVE rewards as the regular users of Aave. In fact I believe more portfolio managers would be interested in allocating to Aave via Enzyme if the rewards were harvestable. Hence, the economic benefit of the proposal makes sense.