This is an interesting proposal and something we’d likely support
Aave is a general-purpose borrow/lend protocol that supports core blue-chip assets where risk is shared in most cases. So having a specific instance that can be hyper aggressive at targeting a certain market that has proven to be large and isolates risk does make sense
Even if a decent portion of wstETH migrates to the Lido instance, Aave still serves the users who want to borrow stables or other assets and are not interested in leveraged looping.
Our main questions & concerns are:
- Will Aave DAO be the sole recipient of revenue generated from the Lido instance?
- Assuming a significant amount of wstETH & wETH is migrated to a lower RF factor, how much of an impact will this have on DAO revenue?
- Have risk stewards agreed to adding this instance to their scope of work?
- Is the Safety Module expected to cover this instance?