As indicated in this snapshot vote the community has already decided to put an end to the LEND → AAVE migration process. The migration has been active for almost two years now and was also supported by centralized exchanges like Binance. After two years, there is still 4% of the supply of the LEND token that has not been migrated to AAVE, and the migration hasn’t been progressing for many months already, currently stuck at 96.04% of the total LEND tokens. Although it is true that the Ethereum network has been somewhat expansive to use, it is also true that there were many occasions for anyone to migrate even without paying any gas through centralized exchanges. Therefore we can reasonably suppose that the tokens that were not migrated are either lost or their holders have no interest in the Aave ecosystem. With that in mind, I suggest the following:
Stop the migration process after a grace period (say two months)
Recover the AAVE that were not migrated to the AAVE ecosystem reserve
Burn the ownership of the Migrator contract. This will burn all the LEND tokens forever.
The community can then decide what to do with the AAVE that were recovered. It looks like we have three possibilities:
Burn the recovered AAVE
Raise capital to increase the Protocol Controlled Value and protocol revenue. This can happen either through bonding or through auctions.
Keep the AAVE in the ecosystem collector for future incentivization within the Aave ecosystem.
A few aspects I think we should consider:
Users that were demonstrably not able to migrate (for example, holders that sent the LEND tokens to the token contract by mistake) should be allowed to receive their equivalent in AAVE tokens.
The AAVE equivalent to the amount of LEND sent to 0x0 (https://etherscan.io/address/0x0000000000000000000000000000000000000000) during the phase 1 of the Aave protocol can either be recovered or burned. The amount is 25K AAVE tokens, that have increased in value substantially over the course of the last two years. If recovered, this could be considered a very profitable buyback by the governance.
The idea is to bring the topic up to discussion and then have a vibe check through snapshot. Bgdlabs has included in the proposal the effort for the implementation and execution of the above, which should happen fairly quickly.
I think a third scenario to consider would be a potential token swap with another DAO, perhaps Balancer. Or even deploying a bonding curve contract to acquire $CRV, $CVX or $BAL on market. Any of these three tokens can then be used to direct incentives to aToken pools.
With $AAVE at $162, 25K tokens are worth around $4M. I’d like to see the funds reinvested into growing the protocols revenue through boosting rewards on DEX pools that support aTokens.
High gas prices have made it cost-prohibitive to swap small amounts of LEND for AAVE.
At the risk of sounding overly dramatic, this proposal amounts to theft and should not be approved. These tokens are the property of the people who received them and should not be taken without their explicit permission.
Hi @Emilio
Is it possible to airdrop AAVE equivelent to those who have for some reason missed the migration minus some fee for example?
The fee would compensate for the gas price.
Thanks for the comment @ChrisBlec. I think theft is a strong word (and widely inappropriate in this context) - i am not suggesting to steal anything to anybody and this would be against my and the aave community ethos. I want to highlight a few aspects that i should perhaps have put in the main thread from the beginning on why the current LEND migration is a liability for the Aave community and the AAVE Token:
Most users forgot/dont even know that there is an ongoing migration as many of them werent around when LEND was a thing. As a consequence of that, the migration feature in the app often causes mistakes and confusion, which community members and active participants need to spend time handling (this happens often, you can hang around in the discord or telegram channel and you will see it happens more often than not). Surely we could remove the migration feature from the client and tell the users to migrate through etherscan, that doesnt solve the underlying issue though that it takes away time and resource that could and should be spent differently.
The LEND token circulating is practical non existent, there is still some minimal liquidity available in dexes (uniswap V1/V2 and sushiswap) which means that the price of LEND can be easily manipulated against the price of AAVE. This can cause confusion and at worst oracle/liquidation problems which would affect Aave V1 where the LEND token is still active as there are positions open.
There are scams running around the LEND token, just a few weeks ago people were airdropped a fake LEND token and scammers put up a fake migration page where the migration would actually approve and steal funds from the users.
For these three reasons i think it’s only fair we put a termination date to the migration process (and the community already voted for it btw). The LEND token in its current form is a technical and financial liability for the Aave community. Then i 100% agree that we should make it as easy as possible for users to migrate during the remaining grace period.
Lastly, although i recognize gas cost has been high and the network expensive for a long time, there were plenty of occasions to migrate for cheap and for free (through cexes). LEND holders that didnt migrate are essentially placing a burden on their own investment and on the Aave community as a whole.
Of course I’m biased but I think Aave should be one of the pioneers and leaders in the upcoming BAL wars:
Aave and Balancer have been long term partners with several common projects and deep integrations
Balancer is doubling down on making all assets capital efficient with boosted pools. Aave plays a key role in this effort: our first (and probably most liquid stable boosted pool still for a while) lends all its assets to Aave
Liquidity for aTokens is super key for Aave to maintain its leadership position and Balancer can be its AMM of choice given all the power Aave will have in the upcoming BAL wars.
I’m sure the Balancer community will welcome conversations about a BAL <> AAVE token swap but I think it will appreciate even more if there is a partial market purchase or swap with stables.
Thanks @Emilio for bringing up the proposal forward. Significant time has passed since the migration and I would imagine that we would see less and less migration movement over time.
Most of the migrations for the past 3 months has been quite small amounts (excluding few bigger ones). Since the main idea of the proposal is to recover the funds and use as protocol controlled value, there is not rush yet to execute the proposal, given that the AAVE ecosystem reserve has 1.8 mm AAVE (and significant on-going revenue).
I am in favour of the proposal but recommend to execute it later in time - maybe even until 2nd October 2022 which would be exactly 2 years after the migration started and fair amount of time for community members that might not actively follow the developments in the community. Giving this deadline publicly might accelerate the migration slightly.
Whether AAVE governance decides to move forward with this now or somewhere later this year, I would be eager to explore a DAO Partnership between AAVE & BAL.
I’m Luuk, DAO Partnerships lead for BalancerDAO and have successfully facilitated alignment efforts with some of our primary stakeholders (FEI / GnosisDAO). AAVE is the only significant Balancer partner with whom we haven’t established a DAO Partnership and executed a Token Swap.
Given our deep synergies, I think a DAO Partnership would be mutually beneficial.
Who should I chat with from AAVE to start exploring this? @Emilio@stani
It’s like you put your money in the bank, forget to take it out, and then the money is gone. This is robbery. In this way, the price of AAVE can fall to $10
I would suggest migrating the LEND to AAVE and then creating a timed claims period through the AAVE interface? This way, addresses that sent LEND tokens to the contract can claim AAVE tokens, as well as the addresses that sent 0x0.
I’m open to any of the three possibilities with what to do with the unclaimed AAVE.
Is there maybe a way to actively contact these wallets?
What i have in mind is something i experienced by myself. I was WL for a NFT mint. But i didn’t know that. The team did something really cool. They created for every wallet that had only 24h left to mint, a NFT on Polygon and dropped it to the wallets, like mine. They then also created a high bid with like 999 ETH. Opensea then contacted me by email and told me someone wants to buy my NFT for 999. I didn’t know which NFT so i checked it through OS and saw that i had this Polygon NFT that said, “You are WL, please mint. More information on discord…”
I think you get what i mean. If they didn’t dropped that NFT to me and created a bid, i would have never minted that NFT.
After WL they deleted the NFT somehow (as i cannot find it anymore).
You can ask the tubbycats team how they did that. I think that was a really cool idea, which could be used here too. This way we could reach out to a lot people, if they are still active in some way, as this high bid would trigger them. If they don’t give us a reaction at all this means the wallets are abondend.
Edit: Also after checking some of the biggest wallets in the old Lend contract, you can see most of them are active wallets, having in general a very wealthy wallet. I think these people would swap immeaditely their funds, which would easily end up in 98-99% being swapped.
The rest are dust wallets with nearly no activity.
But let us discuss
One other scenario to consider is that swapping LEND (or any LEND derivative such as Uniswap or Balancer LP tokens) for AAVE is a taxable event, and some may be deferring that action.
Overall, I’m a bit opposed to this approach to “finding change in the couch-cushions”. DeFi protocols should try to behave as immutably and trustlessly as possible.
But is it really a taxable event? I mean stock splits aren’t a taxable event too in probably 99%.
Even in germany the swap was no problem for me, even though they tax everthing they can…
This is interesting - and clearly an impassioned proposal.
Attracting perspectives from the likes of @stani, @ChrisBlec, @MatthewGraham et al. These are all individuals deeply passionate about Aave.
As someone who did not join the space nor protocol until after the EthLend days - it is more difficult for me to comment on the merit or the emotions of these token holders.
Where can I see this contract?
I am curious what % is active wallets. As for contacting them, there are interesting products being developed such as XMTP, however, they are not live yet.
As Aave’s treasury grows, I believe we have time to best understand how to balance fairness and reclaim unused funds - and do so with transparency.
My opinion is that we as a community should try to help AAVE holders as much as possible, specially on processes like this type of migrations, that as we know are always problematic.
That being said, I also think there is some point where the community should be able to take certain harder decisions like this if more or less everything was tried. The migration is running for more than 2 years, so given things like @Emilio mentions of even CEXes allowing transparent migration for free, it is a bit difficult to understand how holders of LEND can be aligned and not doing the technical migration to AAVE, basically not being able to participate in governance or any other community on-chain dynamic.
Still, I would say there should be a last attempt on trying that those LEND holders swap. And given that maybe it is true that the issue is still the cost of the migration, doing something like allowing the migration in Polygon or Avalanche, where it could be done for USD cents, even potentially sending some funds to cover the cost on that network.
If people still don’t migrate, I agree that basically, it means there is no interest from their side to really participate anyhow on the AAVE tokenomics, and or the migration should be simply stopped, or stopped and the funds recovered.