Title: [TEMP CHECK] Add ggAVAX to AAVE v3 on Avalanche
Author: @b_tanyeri Founder at Daybreak Digital, an Avalanche focused crypto fund
This TEMP CHECK proposes to add ggAVAX, a liquid staking token for the Gogopool protocol, to AAVE V3 Avalanche market.
Gogopool is one of the premiere liquid staking protocols on Avalanche. They have over 100 active minipool node operators, and over 250,000 ggAVAX minted on Avalanche’s c-chain. Allowing ggAVAX to be used as collateral with a trusted partner such as AAVE will enhance both ggAVAX liquidity as well as AAVE’s dominance in the Avalanche ecosystem.
Project: Gogopool Website
Twitter: Official Twitter
Official Documentation: Docs
ggAVAX contract: ggAVAX Contract
^ please note this is using snowtrace.dev as snowtrace.io is being retired at month end
Balancer: ggAVAX-WAVAX pool
ggAVAX enjoys deep liquidity on the c-chain, with over just under $5m in the ggAVAX/WAVAX balancer pool.
In order to create a reliable price feed for ggAVAX for Avalanche for AAVE to utilize, I propose we incorporate the appropriate getRate function from the ggAVAX contract and combine it with existing AVAXUSD chainlink price feeds.
I am in investor into the Gogopool protocol. I run minipools and have exposure to both the platform and the GGP token.
- Gather the AAVE community’s feedback on this proposal.
- If consensus is reached, escalate this proposal to TEMP CHECK snapshot stage.
- If TEMP CHECK snapshot outcome is yes, escalate to ARFC.
- If consensus on ARFC is reached with appropriate technical details added, then escalate to ARFC snapshot.
- If ARFC snapshot approved, then escalate to AIP Stage.
Copyright and related rights waived via CC0
using getRate from ggAVAX multiplied by AVAX/USD feed is alright to get a sense of the “fair value” of one ggAVAX token, however, to do safe lending, we need to know the actual spot price of ggAVAX
liquid staking tokens can depeg for long periods of time below their “fair” value (see stETH vs ETH depeg in May 2022)
Using Base/USD Oracle + internal exchange rate is in line with what AAVE does for other LSTs such as wstETH and sAVAX.
For example, here is [sAVAX oracle]. (Address 0xc9245871D69BF4c36c6F2D15E0D68Ffa883FE1A7 Details - Snowtrace), which uses sAVAX/AVAX rate from the contract and AVAX/USD price feed.
Since the major use case for an asset like ggAVAX is borrowing of correlated AVAX, this post also might have some relevant context.
Also important to note that stETH/ETH “depeg” occurred before withdrawals were enabled, which was arguably the biggest contributing factor to the whole situation, so it’s not exactly applicable to the current state of ETH and, especially, AVAX LSTs.
This proposal has been escalated to the snapshot stage
Vote starts tomorrow.
As the Head of DeFi for the GoGoPool protocol - I would like to add the following notes to b_tanyeri’s proposal.
ggAVAX is currently yielding ~4.8% APR, which is expected to rise on an ongoing basis as more Subnets come online. Users can track the live APR and other relevant metrics, such as the amount available for staking, on our custom dashboard.
We believe ggAVAX represents an excellent collateral option for users looking for ways to:
a) “loop” ggAVAX→AVAX→ggAVAX for increased yield (a viable strategy when ggAVAX APR > AVAX borrow APR)
b) borrow stablecoins for short-term goals or needs, without reducing their exposure to AVAX, while offsetting a portion or all of the interest incurred with the ggAVAX yield
We expect option A to be more popular, which would help drive utilization of AVAX deposited into AAVE. There is currently ~50k ggAVAX distributed across more than 800 users who are holding it in their wallets without participating in DeFi strategies. These holders represent more than $1.5M in potential deposits, and we expect this deposit potential to increase rapidly, as ggAVAX is the fastest growing LST on Avalanche. For reference – in Q4 2023, ggAVAX supply grew by 47%.
GoGoPool is committed to incentivizing deep ggAVAX-AVAX liquidity on Avalanche with more than $7.5M in Balancer Stable Pool, which currently holds ~100k AVAX. If the DAO approves the listing of ggAVAX on AAVE, we will be looking to incentivize applications that build on top of it, such as automated strategy/leverage vaults.
GoGoPool takes security seriously, with the first audit completed by Zellic, followed by a Code4rena Competitive audit. Last week, we also launched an Immunefi bug bounty program to help secure the protocol as the adoption grows.
Following Snapshot supervision and results, vote failed to reach 320K YAE votes.
This means that despite having YAE as winning option, the proposal didn’t get the minimum Quorum of 320K votes on the winning option, therefore Snapshot has not passed. For more reference please visit ARFC and TEMP CHECK Framework