[TEMP CHECK] Onboarding sfrxETH to Aave V3 Ethereum Market

Governance
1

Title: [TEMP CHECK] Onboarding sfrxETH to Aave V3 Ethereum Market

Author: @marczeller - Aave Chan Initiative

Date: 2023-11-12

Summary

Seeking community sentiment on adding sfrxETH to the Aave V3 Ethereum market to enhance LST liquidity and asset diversity.

Motivation

sFrxETH is the Staked version of FrxETH from the Frax Ecosystem. Users can freely mint frxETH in exchange for ETH deposits.

The Aave-Chan Initiative supports LST diversity in Aave V3 as shown with our historical support of cbETH, rETH, and, parallel to this proposal, our support for ETHx.

This proposal is a reboot of ARC Proposal: Onboarding sfrxETH from Frax Protocol to Aave V3 Ethereum Market from January. More details for sFrxETH can be found in the first proposal.

Specification

Proposed risk parameters will be shared at the potential ARFC stage of this proposal.

Next Steps

  1. Gathering community feedback through discussion.
  2. If consensus is positive, escalate to TEMP CHECK snapshot stage
  3. if TEMP CHECK snapshot outcome is YAE development of a detailed ARFC with technical specifications and implementation plans.
  4. Escalation to ARFC snapshot
  5. if ARFC snapshot outcome is YAE, escalate the proposal to the AIP stage

Disclaimer

This proposal is powered by Skywards.

The Aave Chan Initiative is not directly affiliated with Frax Protocol and did not receive compensation for creation this proposal.

Copyright

Copyright and related rights waived via CC0.

8 Likes
2

We are in support of this proposal!

We believe that sfrxETH will be a valuable addition to the LSTs on the Aave V3 Ethereum Market.

2 Likes
3

Also supportive, Frax has been around for a while and an important player.

2 Likes
4

Full support for listing sfrxETH on AAVE v3.

1 Like
5

We’re supportive of sfrxETH listing.

3 Likes
6

I’m really eager to see new LSTs in Aave, contributing to decentralize the staking landscape. However, I’m somewhat concerned about listing sfrxETH.
TVL may have grown since the last forum post, but have all the trust assumptions and centralization risks, highlighted by @monet-supply and @WintermuteGovernance here, been solved?

AFAIK they have not, as the v2 update has been constantly pushed back, and there’s no precise timeline for it.

Needless to mention the huge third-party risk Curve poses to sfrxETH and frxETH (as well as the entire Frax ecosystem). If any disaster were to happen to Curve and that frxETH/sfrxETH pool, Aave would rapidly notice its exposure to sfrxETH, which liquidity is also completely centralized.

1 Like
7

this proposal has been escalated to the snapshot stage

vote starts tomorrow

1 Like
8

imo supply caps should be tightly limited until admin controls and validator operator infra are further decentralized. That being said, frxETH liquidity is pretty decent and it seems likely that it would see healthy usage.

1 Like
9

this can be more discussed at the ARFC stage, TEMP CHECK is to gauge any strong disagreement from the community.

Service providers are invited to provide stronger feedback then.

5 Likes
10

Does the TEMP_CHECK need to meet quorum to proceed to the next stage?

11

Yes it needs minimum 320k YAE votes and to pass before it proceeds.

2 Likes
12

Agree with @monet-supply, we’re happy to support the listing of sfrxETH as it’s a solid asset that’s widely used, but we’d like to see caps reflect its lack of decentralization assuming it goes through to the next stage of the governance process.

13

This proposal has passed TEMP CHECK snapshot stage and we have opened the ARFC stage here.

2 Likes
14

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