[TEMP CHECK] Aave x Metis: Strategic Alignment Initiative
Author: Metis
Date: 2024-11-19
Summary
We propose a strategic partnership between Metis and Aave to create a mutually beneficial, long-term collaboration that will drive competitive advantage and enhance user experience.
Objectives
Establish Metis as a preferred chain for Aave users
Create a sustainable funding model for Aave markets on Metis
Leverage Aave service providers’ expertise for optimal token allocation
Support key Aave initiatives, including GHO proliferation
Implementation Strategy
Perpetual Funding Stream
We propose delegating the remaining Metis tokens reserved for Aave emissions to an Aave sequencer. This approach offers several advantages:
Sustainable Incentives: Creates an indefinite drip of emissions, ensuring long-term user retention
TVL Stability: Prevents potential TVL decrease after grant depletion
User Retention: Maintains competitive yields, discouraging users from migrating to other chains
Collaboration with Aave Service Providers
By partnering with expert service providers such as BGD, ACI, Chaos, and Llama Risk, we can:
Optimize token allocation and emission management
Align with Aave’s strategic objectives
Develop tailored solutions for the Metis ecosystem
GHO Integration
With CCIP enabled on Metis, we are well-positioned to support GHO proliferation:
Develop Metis-specific use cases for GHO
Contribute to GHO’s adoption and utility within the broader DeFi ecosystem
Expand GHO adoption with payment partners and within emerging markets
Support GHO as the preferred decentralized stablecoin for Metis and broader industry
Expected Outcomes
Increased TVL and user activity on Aave markets within Metis
Enhanced positioning of Metis as an integral part of the Aave ecosystem
Improved user experience through optimized incentives and features
Accelerated growth of GHO adoption on Metis and beyond
By implementing this proposal, we aim to create a unique value proposition that benefits Aave, Metis, and the entire DeFi community, establishing a new standard for cross-protocol collaboration in the blockchain space.
Disclosure
The ACI is not directly affiliated with Metis and did not receive compensation for creation this proposal.
Next Steps
If consensus is reached on this [TEMP CHECK], escalate this proposal to the Snapshot stage.
If the Snapshot outcome is YAE, this proposal will be escalated to ARFC stage.
Publish a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage.
If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal
Apologies for not providing feedback earlier, but given the lack of delegate/community interest we will be voting against this proposal on the position that the Aave DAO should not necessarily decide on a chain to be their preferred chain. Aave should continue to expand across all chains where and when it makes sense to do so, offering competitive yields and suitable markets. Aave should focus on beating out competitors and not other Aave instances.
We see no issues with the Metis team continuing to incentivise key markets to provide ‘better’ yields in comparison to other Aave V3 instances, but we don’t think it’s right for Aave to publicly designate a ‘preferred’ chain
I would like to know the rationale behind choosing Metis as the preferred chain.
Metis is one of the smallest Aave deployments we have, the would be way better candidates to choose which would have higher TVL, more potential (in my opinion) and same gas fee level or at least similar.
If this proposal is lead by the Metis Foundation which wants to grow their chain with incentives, this is totally fine but I wouldn’t label it as the “preferred chain”.
I’m not for or against it overall but in the current state I’m going to vote Nay.
If the proposal will be adjusted and the DAO is simply trying to grow Metis ecosystem with liquidity and incentive campaigns I’m fine.
To clarify, the intention of this proposal is to find a way to bring more long-term value and alignment to our Aave instance via on-boarding Aave as a sequencer partner on Metis.
With the existing commitment from Metis Foundation for Aave incentives, moving the remaining amount to a Metis sequencer will extend and grow the reward pool directed to the Aave community, which supports Aave’s ongoing growth and community participation.
The line of “establish Metis as a preferred chain for Aave users” may be clouding the rest of the proposal. This simply means establish a unique value-add for Aave on the Metis ecosystem, as well as use sequencer emissions to support key Aave initiatives (like GHO proliferation, integrations, use cases), and isn’t a comment about crowding out competition or establishing superiority.
We want to provide more value to the Aave ecosystem in a creative and strategic way, driven by and fused with our innovative decentralized sequencer architecture, working together to push shared strategic goals forward.
This proposal was designed to be a win-win situation:
Aligning more closely with Aave, its service providers, and the Aave community, while driving forward our vision of decentralization and shared network ownership.
Please do let us know if there are any other concerns or issues with the structuring or verbiage in this proposal. Happy to clarify any further points!
We are supportive of this proposal to strengthen Aave on Metis. Currently, Aave leads DeFi activity on Metis with $21.7M TVL ($34M including Borrows), representing 36% of the chain’s TVL. Given Aave’s multi-chain presence, Metis’s initiative to develop a tailored growth strategy demonstrates valuable chain-specific innovation that strengthens the broader ecosystem.
The proposed allocation of $METIS rewards through an Aave sequencer would establish perpetual mining rewards for Aave lenders on Metis, replacing the current fixed rewards. This structure effectively addresses the challenge of mercenary capital by creating sustainable, long-term yield incentives. We are also excited by Metis’s focus on GHO adoption. While stablecoin markets are already established on ETH ($101B) and Arbitrum ($5.2B), Metis’s smaller stablecoin market ($28.45M) provides unique potential for GHO growth, especially with direct ecosystem support from Metis through this alignment.
After Snapshot monitoring, the current TEMP CHECK Snapshot has ended, reaching both Quorum and YAE as winning option, with 722K votes.
Therefore, the TEMP CHECK has PASSED.
Next step will be the publication of an ARFC to continue gathering both community and Service Providers feedback before moving the proposal through governance.
