We propose the onboarding of USDai and sUSDai on Aave V3 Plasma & Arbitrum Instance.
This listing would initially enable users to deposit USDai and sUSDai to earn yield and borrow them as stable assets in a USDt-only E-Mode.
Motivation
USDai and sUSDai are innovative stable assets backed by AI hardware infrastructure and idle reserve assets, designed to merge real-world infrastructure finance with DeFi.
As emerging stablecoins with strong venture backing and early adoption momentum, USDai and sUSDai represent a differentiated design that expands Aaveâs exposure to innovative collateral types while offering users stable units of account and new yield-bearing options.
Key differentiators:
Hardware-backed design: Both tokens leverage GPU/AI compute hardware as collateral, creating a new RWA category.
Dual-token structure:
USDai serves as the stablecoin for payments and borrowing.
sUSDai accrues yield from lending to AI firms and low-risk asset allocations.
Growing ecosystem:
Planned launch on Plasma with $500M in deposits ready for deployment on Plasma mainnet.
Arbitrum is Already the main Hub for usd.ai echosystem and Aave is set to take a lionâs share of their liquidity and associated borrowing volume
Specification
Risk Service Providers will provide Risk Parameters and proposal will be updated accordingly.
Incentives:
The USDai team is considering incentive programs to boost adoption and enhance the competitiveness of USDai and sUSDai borrowing rates compared to other stablecoin assets on Aave Plasma. There are additional incentives planned as part of the launch of USDai on Plasma.
Detailed incentive structures will be shared with Aave DAO contributors and the community in the ARFC stage.
Disclosure
ACI are not affiliated with USDai and have not received compensation for the creation and review of this proposal.
Next Steps
Publication of TEMP CHECK to gather community & service providers feedback, and escalate to TEMP CHECK Snapshot.
Publication of a standard ARFC, if TEMP CHECK Snapshot passed, to continue collecting community & service provider 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.
Can the ACI provide a business justification why Arbitrum wasnât included here? Since USD.ai is already native to Arbitrum, it seems natural to consider it as well.
This proposal has been update to include an Arbitrum deployement as a priority first step and cadidate network for onboarding for USD.ai as thereâs already a proven market in there ecosystem and synergies opportunities with the DRIP incentives program.
Big support for adding USDai and sUSDai to Aave on Plasma and Arbitrum.
On Plasma, Balancer already has the largest USDai pool paired with USDT0 boosted on Aave. LPs earn Aave yield while keeping liquidity for trading. Looking forward on having a pool with both tokens going to Aaveâs lending market!
This model has proven to work and shows how Balancer and Aave together deepen liquidity and utility for the ecosystem.
Excited to see both assets live on Aave markets and keep building side by side.
Would be great to understand the risks associated with this newly stablecoin backed by GPUs and t bills (as I understood). @LlamaRisk could you provide an analysis at ARFC regarding liquidation, which obviously happens off chain for the hardware and the consequences, yield sources, backstop mechanism, etc.
That way the DAO can better understand the underlying risks.
Shouldnât it be mentioned as part of the initial analysis here that USDai is an m^0 asset, and the backing is actually in USTB, not hardware? And that sUSDai is allegedly getting yield from loans given against âAI hardwareâ collateral, of which there is zero transparency? The tokens, while similar, actually donât have all that much common in terms of risk profiles, and the staked version has a far, far bigger risk involved since itâs lent out against highly illiquid collateral?
Given the popularity of leveraged yield trades on Aave and our usersâ desire for a broader variety of assets to use as collateral for this trade, we believe that expanding the set of yield bearing stablecoins on Aave is a promising direction for growth. USDai and the staked version have shown great promise and although still fairly new, the market has shown significant appetite for both spot and PT tokens for these assets.
By increasing demand for stablecoin debt on Aave through new assets like USDai, deposit rates will remain competitive with smaller protocols, ensuring that new inflows into lending markets and DeFi more broadly will continue to head to Aave.
We believe USDai is a good asset to onboard as part of a strategy of expanding the universe of yield bearing stablecoins on Aave and increasing stablecoin demand, we recommend its onboarding from a business perspective.
Yield generated from lending against GPUs & datacentre infrastructure.
Previous adverse events
None.
Borrow assets
USDC/USDT/GHO.
Disclaimer
This review was independently prepared by ACI. ACI is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.
I would like to warn against the listing of USDAI and sUSDAI on Aave.
USDAI team has a long history of showing a lack of professionalism in everything they are doing.
Just checking USDAI chart should convince you. What was supposed to be a stablecoin is trading like a memecoin due to them willing to create some âhypeâ and setting artificial supply caps. Their erratic communication around future cap raise is an other evidence of that: it went from cap raise âin few weeksâ, to now âin few monthsâ. Maybe weâll hear âin few yearsâ soon.
One of Aaveâs competitor was having a market allowing to borrow USDAI, oracle was hardcoded to 1:1. Given the high LTV, there was a risk of bad debt accrued by the protocol. To prevent that, they had to proceed with an emergency cap raise (which they did not call that way) through Concrete, the worst vault manager of the whole DeFi and TardFi combined (they managed to double send some withdrawals during Berachain Boyco campaign and also had issues on Corn, having to compensate users out of pocket).
Suggesting to list sUSDAI almost gave me a heart attack when we know the collateral is GPUs with a pretty high LTV for an asset with such a low lifespan. Adding to that the redemption period of 30 days to get USDAI back, which would make it impossible for Aave to manage risks effectively.
Overall, listing USDAI and sUSDAI on Aave would pose significant risk to Aaveâs reputation, branding and LPĂ«rs. I imagine a lot of suppliers would move their business elsewhere given the considerable risk that would definitely not be compensated by historical supply rates.
the AIP will not escalate until service provider do their review job, they are independent and will publish their opinion as part of their scope of services for this DAO.
I build this governance to ensure thereâs safe guardrails.
Next step will be the publication of an ARFC to continue gathering feedback from both Community and Service Providers before moving forward through governance.