[TEMP CHECK] Rollout plan for Cross-Chain GHO

Author: Aave Labs

Date: March 22, 2024

Summary

This TEMP CHECK serves as an initiative to engage with networks interested in incorporating the GHO stablecoin into their ecosystem. Aave Labs intent is to kickstart a public and transparent procedure to pinpoint the most appropriate network for the beginning of the cross-chain strategy of GHO.

Motivation

Following the successful vote to employ Chainlink’s Cross Chain Interoperability Protocol (CCIP) as the first bridge for the cross-chain strategy of GHO, the development of a rollout plan is now imperative. A phased approach to the rollout will permit the DAO to initiate cross-chain GHO deployments in a controlled and secure manner, meticulously evaluating each step of the process, and sequentially broadening to additional networks as time progresses.

Drawing from the research conducted by Aave Labs to identify suitable networks for the initial phase, it is deemed crucial for the DAO to lead this exploration with transparency. This approach encourages all members to actively participate, voice their opinions, provide feedback, and welcome proposals from various networks.

Networks that choose to integrate GHO could significantly enrich the stablecoin ecosystem within their domain, granting users access to the native Aave Protocol stablecoin. The onboarding of GHO to these networks comes with a variety of integration opportunities within the new ecosystem, potentially unlocking novel functionalities and enhancing user experience.

Specification

To ensure a structured and streamlined process, we propose dividing this procedure into two phases:

1. Submission Phase (March 22 - April 1, 2024)

This phase focuses on gathering comprehensive information about each network’s proposal, ensuring that all of them are documented and accessible for community evaluation.

Running until April 1, 2024, networks have the opportunity to submit their proposals, which must cover at least the following areas:

  • The connection between the proposal’s author and the network
  • A brief high-level summary of the network
  • An explanation of the network’s relationship with the Aave ecosystem
  • An outline of the opportunities that the adoption of the GHO stablecoin could bring to both GHO and the Aave ecosystem. Examples of such opportunities include:
    • Protocols, such as decentralized exchanges (DEXes), that could support the creation of significant liquidity
    • Possible synergies with other stablecoins or assets within the ecosystem
    • Tools and incentive programs designed to encourage participation

2. Discussion and Evaluation Phase (April 2 - April 12, 2024)

Following the submission phase, a 10-day period of community engagement, discussion, and preliminary evaluation begins. This phase allows the community and risk providers to delve into the proposals, offering feedback, raising questions, and assessing the feasibility and potential impact of each proposal on the Aave ecosystem.

The aim is to foster an informed and collaborative decision-making process, culminating in a snapshot vote to determine the most suitable network for GHO’s cross-chain expansion.

Aave Labs invites the DAO risk providers and contributors, such as @ChaosLabs , among others, to share their insights and feedback on the viability of expanding to the specific network from a risk management standpoint.

Conclusion & Next Steps

This TEMP CHECK proposal aims to establish a forum for the DAO to be able to get information about potential network opportunities for GHO and for the community to explore the prospects of introducing GHO to other networks. Following a period of discussion, a snapshot vote will be created on April 13, 2024, enabling the community to make a decision on the most appropriate network for cross-chain GHO.

Aave Labs

18 Likes

Author: Metis L2

Date: Mar 26, 2024

Summary

The TEMP CHECK proposes a strategy for integrating the GHO stablecoin, the native Aave Protocol asset, into the Metis L2 Blockchain. The objective is to introduce GHO liquidity and accessibility while maintaining security and stability.

Motivation

The recent Temp Check proposal by Aave Labs shows a desire to move GHO crosschain. As stated in the proposal, the current limitation of GHO, which is primarily accessible only via minting on the Ethereum mainnet or through secondary markets, represents a significant constraint in its potential reach and utility across DeFi. There are quite a few reasons why we feel the Metis L2 is the perfect layer 2 blockchain for GHO expansion:

  1. Metis recently announced a major partnership with Chainlink Labs (Metis Integrates Chainlink’s Cross-Chain Interoperability Protocol Amid Restaking Push - The Defiant) which is the proposed bridge for the GHO stablecoin per the GHO Cross-Chain Strategy Temp Check.

  2. Metis has a burgeoning liquidity layer with new launches like Hercules which will offer strong and consistent yield options for GHO minters.

  3. Metis already has a strong relationship with Aave with our lending market featuring over $50M in TVL and growing.

  4. Metis believes in a future where users are given a multitude of options as it pertains to yield-bearing stablecoins and GHO fits that bill.

  5. Metis became the first L2 to decentralize its sequencer (Metis launches alpha version of its decentralized sequencer | The Block) which will offer unprecedented yield opportunities which can be paired with the GHO stablecoin.

  6. Metis routinely bets on growth assets or assets where we expect to see outsized growth over a given cycle and we feel that GHO is positioned well to outperform other stablecoin options.

Upon approval, we will work with the Aave DAO to deploy the GHO token on the Metis blockchain where GHO will be supported by the Aave DAO. We will leverage the custom CCIP token pool contract to facilitate the transfer of GHO between mainnet and Metis. We will work with the multitude of dApps on our network to help foster GHO growth in the Metis ecosystem.

Conclusion & Next Steps

The TEMP CHECK’s proposal to integrate the GHO stablecoin into the Metis blockchain is a major step towards enhancing the utility and expansion of GHO. By leveraging Chainlink’s Cross-Chain Interoperability Protocol (CCIP), users will be able to bridge GHO in a secure and easy way. Following a positive evaluation of this proposal, our actions will include:

  • Putting the proposal to formal vote

  • Working with BGL to set parameters

  • Working with native dApps to ensure day 1 liquidity options

  • Create a robust marketing campaign highlighting GHO landing on Metis

  • Routing competitive incentives to GHO liquidity, ensuring targeting an initial market size of 20-25M GHO.

Metis L2

3 Likes

For the sake of clarity, I’d like to be clear that the successful Temperature Check snapshot is not a binding vote to employ CCIP for cross chain GHO, but rather to gauge community sentiment on whether the proposal is relevant to the DAO, which only comes after the discussions of the ARFC phase. Chains that are not currently supported by CCIP should still be evaluated at this stage given they can be strategically relevant to GHO.

2 Likes

This is a proposal by the Ava Labs DeFi Business Development Team, which has been the primary group interacting with various stakeholders in the wider Aave ecosystem on behalf of the Avalanche Foundation.

We are proud to have built a long-standing relationship with Aave DAO, having spent years contributing to the growth of the Aave ecosystem, and we welcome transparency in this exploratory process.

High-level summary of Avalanche

  • Scalable technology: Avalanche is built upon two key technical breakthroughs: Avalanche Consensus & Subnets. Learn more here. DeFi dApps on Avalanche benefit from its high throughput, extremely low time-to-finality (< 2s) and instant confirmations.

As one of the leading EVM DeFi ecosystems, we have aimed to create a very welcoming development environment for DeFi builders. There are extensive resources available and Avalanche is compatible with an overwhelming majority of Ethereum tooling, in addition to having best in class wallet support, analytics, RPCs, explorers etc.

Network’s relationship with the Aave ecosystem

  • The Aave protocol was initially launched on October 4th, 2021 with significant support from the Aave community and was the first recipient of the Avalanche Rush incentive campaign.

  • Avalanche Rush enabled Aave’s initial hockey stick growth on Avalanche: TVL grew from $0 to $2.7b in a month, catapulting Avalanche to Aave’s second largest market, eventually reaching up to $3.2b in TVL.

  • This successful growth was repeated again with significantly less incentives with the deployment of Aave V3 which quickly reached upwards of $900m in TVL.

  • Avalanche has partnered with other key stakeholders in the Aave Ecosystem. It was notably amongst the initial networks supported by CCIP for both testnet and mainnet launch.

Outline of opportunities that the adoption of the GHO stablecoin could bring to both GHO and the Aave ecosystem.

There is a considerable opportunity for GHO to become the leading DeFi-native stablecoin in the Avalanche ecosystem. USDC and USDT make up the large majority of all stablecoins on Avalanche, with no decentralized alternative having seen significant adoption. This creates a unique opportunity for GHO to consolidate itself as the top decentralized stablecoin in one of the largest DeFi ecosystems.

  • Stablecoin liquidity is on the rise: Avalanche has seen significant renewed demand for stablecoins, with over $50m minted in the past few weeks.

  • Avalanche Foundation LP Initiative: the Avalanche Foundation is committed to ensure that Avalanche provides the most liquid markets for both USD and non-USD stablecoins. As part of a wider initiative to create efficient FX markets on-chain, many new stablecoins will be onboarded with both LP and incentive support. Aave DAO could become a key partner in this initiative, with GHO being a prime candidate for newly created incentivised pairs.

  • Countless integration opportunities in the Avalanche Ecosystem: Avalanche’s DeFi ecosystem boasts hundreds of composable DeFi protocols across sub-verticals. This includes:

    • Delta Prime: leveraged DeFi strategies
    • Struct Finance: yield tranching fixed term vaults
    • GMX: on-chain perps exchange
    • Trader Joe: capital efficient CLAMM (and so much more).
    • Pharaoh Exchange: (3,3) CLAMM
    • Many more DEXes: Uniswap, Balancer, Pangolin
    • Xave: FX exchange on-chain
    • Benqi: Lending & Liquid Staking
    • CIAN: Automated looping strategies
    • Definitive: Automated DeFi strategies with leverage & custom vaults
    • Yield Yak: Yield Optimizer
    • SteakHut: Flexible liquidity layer for DeFi
    • … and many more!

Incentives

The Avalanche Foundation is able to commit to up to $3M in incentives for a duration of 6 to 12 months to ensure the successful deployment of GHO on Avalanche. The specific disbursement milestones will have to be defined and targets will need to be set, but there are multiple ways in which AVAX incentives can help bootstrap GHO on Avalanche:

  • Supply/Borrow Incentives: Direct incentives can be applied to borrowing and lending rates for GHO.
    • Boost supply rate for collaterals (if available to supply on Avalanche)
    • Reduce borrow rate for GHO (if borrowed on Avalanche against native collateral)

Setting a target % boost and duration to ensure GHO’s competitiveness makes more sense than proposing an absolute amount; these incentives would specifically apply to a native GHO deployment.

  • Liquidity mining for GHO pools: GHO-denominated pairs can receive direct AVAX incentives to ensure sufficient liquidity (below are examples of parameters that we would need to set, not fixed amounts)

    • Eg. pools: GHO-USDC, GHO-USDT, GHO-AVAX
    • Target min. Yield: 20% (base yield 5-10%)
    • Target duration: 6 months
    • Target TVL across pools: $20M
  • Participation in active incentive programs

    • Memecoin Rush: can incentivise memecoin pools paired with GHO across Trader Joe, Steakhut and other DEXes
    • Struct Rush: for any strategies on top of Trader Joe Liquidity Book

The Ava Labs DeFi BD team is committed to pursuing integration opportunities outlined above, ensuring that GHO is supported by key protocols in the Avalanche ecosystem and receives both indirect and indirect support from the Avalanche Foundation.

2 Likes

This is a proposal on behalf of the Scroll team—a rapidly growing zkEVM core to the Ethereum landscape and supporter of the Aave ecosystem—to bring GHO to Scroll and support its growth and liquidity.

Author: Shahryar, Partnerships @Scroll_zkEVM

Scroll

Scroll is an EVM-equivalent ZK-Rollup built upon Ethereum, designed for scaling without sacrificing security, developer, or user experience.

  • Scroll is bytecode-compatible and built upon Geth, enabling seamless migration of apps, infra, and contracts from Ethereum
  • Scroll originated in close collaboration with the Ethereum Foundation’s zkEVM research team within the PSE, and we’ve been contributing heavily to its zkEVM codebase
  • Scroll is pioneering a multi-prover approach to improve security and decentralization

Scroll is on the cutting-edge of L2 technology—given the updates within the next 1-2 months, Scroll will be the zkEVM with the best compatibility, highest security, and shortest finality.

Since Scroll’s mainnet launch in October 2023, it has seen significant traction, including ~150M bridged TVL / ~60M DeFi TVL and 32M+ total transactions (averaging nearly 200K+ tx/day). Additionally, Scroll has one of the fastest growing stablecoin market caps of recent ZK-rollups.

Scroll <> Aave

Scroll has been a supporter of the Aave ecosystem since its launch, making significant efforts for Aave’s deployment early on. This support—in addition to Scroll’s compatibility—enabled Scroll to become the first ZK-Rollup with Aave, only 4 months since our mainnet launch.

In fewer than 2 months, Aave has become Scroll’s third largest DeFi protocol, with almost $8M in TVL. Scroll also makes a continual effort to integrate Aave with premier upcoming DeFi protocols on Scroll (e.g., Lido wstETH upon its recent recognition on Scroll).

GHO Opportunities

  • DEXs: Scroll hosts a variety of DEXs, from blue-chips like Uniswap and Sushiswap, to highly successful new models such as Ambient, covering the scope of concentrated liquidity to ve(3,3). All of the DEXs above, in addition to many more, are running or planning incentives (e.g., emissions, points, etc.) designed around building significant liquidity for critical new assets.
  • Other DeFi use cases: If the DAO and contributors are interested in expanding GHO’s usage to other lending protocols, there are other unique lending models on Scroll (e.g., isolated permissionless markets on cog finance) that could have markets for GHO. Furthermore, there are several perpetuals DEXs and more to come on Scroll that could use GHO as collateral if interested.
  • Stable/Asset Synergies: Scroll is committed to significantly increasing the liquidity of existing collateral assets for GHO onchain (e.g., wstETH, USDT, USDC, AAVE, etc.) and also supporting liquidity for potential new collateral assets as they become relevant. Scroll is also making a huge push for onboarding various other stablecoins and similar assets (e.g., LUSD, USDe, paraUSD, etc.); these could be beneficial for various use cases, such as pairing in pools to help stabilize GHO, etc.
  • Tools and incentive programs: Scroll is willing to explore various means of growth for GHO across the network, including but not limited to: integrations, marketing, community, and developer support, etc.

Conclusion and Next Steps

Following the submission phase, Scroll will collaborate with the community and DAO risk providers / contributors to provide further information about the feasibility and potential impact of the proposal. Upon a vote for GHO cross-chain expansion on Scroll, the Scroll team will work with Aave Labs and the DAO on various DeFi, marketing, growth, and community initiatives in preparation for GHO integration.

3 Likes

When deciding when and which networks to deploy GHO on, it is important to consider the lessons learned from launching on Ethereum. Just having liquidity, is not enough to ensure the success of GHO. A lot more coordination and work is required to build an ecosystem of utility for GHO that is sustained beyond any incentive campaign.

When evaluating the emerging proposals, we would like to draw focus toward what the prospective partner will work with Aave DAO to achieve.

  • DEX Liquidity
    • Incentive spend is great for attracting deposits and relies on third parties to deposit funds
    • An offer with a firm commitment of $XYZ Millions in liquidity is a lot more appealing and de-risks the ability to attract deposits. The reward APR to retain deposits can then be worked through.

To guide this aspect of the conversation further, the Aave Liquidity Committee (ALC) has experienced varying degrees of success across Balancer, Curve and Maverick on Ethereum. We also expect the ALC to lead the liquidity initiative on each network. A structured approach with firm deposit commits is a great way to start the conversation.

@TokenLogic welcomes the opportunity to work with any team looking to support GHO liquidity on any network. Please do reach out.

With liquidity somewhat being the initial hurdle that each proposal should address, the more likely distinguishing feature is what integrations and utility can be created for GHO. The best proposals will detail a bootstrapping plan with some of the initial concepts and early integrations already thought out.

  • Utility
    • Payments as a medium of exchange (velocity)
    • Distributions avenue (Widespread adoption)
    • Lending Protocols (collateral, variable & fixed yield)
    • Grant Budgets for Builders (Integrations)
    • Usable as margin in perpetual / structured products (collateral in a stable margin pool)
    • Yield (farming, more advanced strategies)
    • Structured products driving demand (eg: leverage)
    • Primary USD nominated trading pair within protocols (sUSD - Synthetics)

Not all of the above can be achieved quickly, but teams who want to commit to developing the pipeline of integrations will stand out. This does on the surface favour more mature ecosystems with a larger variety of established dApps. However, newer networks can build with GHO and make GHO the focus rather than another stable coin.

Some additional considerations that support the adoption and growth of GHO:

  • Hackathons that promote building with GHO
  • Foundation/Entity supporting network using GHO
  • Teams willing to hold GHO within there treasury

Given the complexity with preparing a proposal for an open forum, we think it would be good to provide an additional 2 weeks to allow more proposals to emerge.

8 Likes

Hey folks! Urv Goel here – I lead Business Development for Optimism. Optimism is on a mission to empower builders to create an internet that benefits all. We are committed to supporting Aave bringing GHO to our ecosystem.

Summary

OP Mainnet is built with the OP Stack, a modular and open-source architecture that enables the deployment of highly scalable and cost-efficient Ethereum Layer 2 solutions. Over 40% of Ethereum Layer 2 networks leverage Optimism’s code, making it one of the most widely rigorously tested development stacks by industry veterans such as Worldcoin, Base, and more. This proven technology provides a robust foundation for the successful deployment of GHO.

The Optimism network is governed by the Optimism Collective and follows the principles of the Laws of Chains framework. This framework prioritizes the welfare of all stakeholders, ensuring fair and transparent decision-making processes.

Relationship with Aave ecosystem

The Optimism Collective has been a long-time partner of the Aave ecosystem. We have collaborated on several initiatives with the Aave DAO and protocol, such as liquidity mining on OP Mainnet, collateral proposals, and more. The OP Mainnet ecosystem has driven significant liquidity to the Aave Protocol on our network through liquidity mining, integrations, and proposals to safely raise caps.

Opportunities

  • Establishing GHO as a Leading Decentralized Stablecoin: Stablecoins continue to grow on OP Mainnet, yet OP Mainnet lacks a prominent decentralized stablecoin. By deploying on OP Mainnet, GHO has a unique opportunity to position itself as a leading decentralized stablecoin in our thriving DeFI ecosystem. Deploying on OP mainnet supports GHO’s expansion goals by providing an entry point into the entire Superchain ecosystem.

  • Wide Range of Integrations: Optimism boasts a wide range of integrations with innovative DeFi primitives across the Superchain. We are keen to assist GHO’s growth and seamless integration with many of these primitives, including but not limited to

    • DEXes across the Superchain (e.g Velodrome / Aerodrome, Curve, Uniswap etc)
    • Derivatives protocols (e.g Synthetix)
    • Yield platforms (e.g Yearn, dHedge, etc)
    • Other forms of collateral on relevant platforms
  • Incentives: The Aave DAO can access incentives on a few different levels for the growth of GHO:

    • Retroactive Public Goods Funding: Potential allocations for Aave’s forthcoming contributions to the Superchain ecosystem. This is a treasury of 850m OP that is earmarked for the purposes of rewarding growth across the Superchain
    • Foundation Grants: The Aave DAO can apply for OP on the Optimism governance cycles. These grants would be compatible with the goals of GHO’s growth plans
    • Growth campaigns: The Optimism Collective will be running several campaigns similar to We <3 the Art in other verticals including DeFi. For relevant marketing initiatives, GHO will have the opportunity to partner and benefit from the visibility around these campaigns

Our team is committed to helping the Aave ecosystem continue to grow with GHO and various other initiatives across the Superchain. We look forward to strengthening our partnership and unlocking new opportunities together.

2 Likes