[TEMP CHECK] Superlend Profit Share Proposal, Deploying a Friendly Fork of Aave V3 on Etherlink (Stage 2 EVM Rollup) and Arbitrum

[berndoostrum]

Author: @berndoostrum - Co-founder of Superlend

Date: 2024-08-27T22:00:00Z

Summary

Superlend is building a lending and borrowing aggregator platform that allows users to manage their positions across multiple chains and protocols, always accessing the best APRs for lending and the lowest rates for borrowing. The Superlend project was Initially conceived during the Etherlink Accelerator in Singapore as a lending and borrowing platform on Etherlink.

Our goals include launching our own dedicated money markets using the Aave V3 codebase on Etherlink and Arbitrum, while also integrating Aave V3 markets already deployed by the Aave DAO across the EVM ecosystem, such as on Ethereum, Base, and Polygon, into our aggregator. For the Arbitrum deployment, we are planning to deploy an instance of Aave V3 that will exclusively support ETH and ETH-correlated assets (such as LRTs and LSTs), similar to Aave’s Lido instance on Ethereum. These deployments and integrations will enable users to seamlessly manage their positions within the robust and secure Aave framework, while also allowing Superlend to offer innovative cross-chain liquidity management features. Additional details for the Arbitrum proposal will be provided in the future as we finalize the risk parameters and asset selection. Leveraging Aave’s well-audited and secure infrastructure allows us to accelerate our development without compromising on security, avoiding the complexities and costs associated with building from scratch.

In recognition of the value provided by the Aave community, we propose a revenue-sharing model, committing to share 15% of the revenue generated from these markets with the Aave DAO.

Motivation

The Aave V3 codebase has established itself as a cornerstone in the DeFi ecosystem, renowned for its reliability, security, and quality. Successful projects like the Spark Protocol and RealT further affirm Aave’s technology and reputation. Superlend’s objectives are twofold: launching our own innovative money markets using the Aave V3 codebase on Etherlink and Arbitrum, and integrating the various Aave V3 markets already deployed by the Aave DAO across the EVM ecosystem (such as those on Ethereum and Polygon) into our aggregator. For the Arbitrum deployment, we plan to deploy an instance of Aave V3 focused exclusively on ETH and ETH-correlated assets, similar to the Lido instance that Aave has deployed on Ethereum. By doing so, we aim to provide users with a cohesive experience that leverages the strength of Aave’s framework while also showcasing the unique features and innovations that Superlend can bring to the market.

One of our other motivations for deploying on Etherlink and Arbitrum-like chains using the Aave V3 codebase is to enable a feature for our aggregator that allows users to keep their USDC in the best APY protocol across chains with a single click. After extensive testing with the LayerZero-like cross-chain protocol Across+, as well as flash-loan scripts, we discovered that integrating an Aave deployment with the Portal feature activated, along with a third-party bridge provider, could allow users to move their USDC positions from Compound on Arbitrum to Aave on Optimism seamlessly. In this scenario, Superlend markets can serve as a “temporary station” where liquidity is parked for a few seconds during the transfer. Before making such a feature live, we would, of course, share it first in the forum and seek feedback when it’s ready.

Superlend’s vision aligns with deploying “friendly” forks of Aave V3, customized for specific use cases and ecosystems, and integrating these Aave V3 deployments by the Aave DAO as a prominent part of our aggregator. Keeping the open-source ethos at the forefront, we believe it is fair and respectful to seek the Aave community’s approval first, ensuring a mutually beneficial path forward for both Aave and Superlend.

As Aave continues to explore areas like off-chain collateral and new developments such as GHO, projects like Superlend have the opportunity to add value and drive the adoption of Aave’s technology. Our proposal to deploy an Aave V3 fork on Etherlink and Arbitrum represents a strategic opportunity to extend Aave’s influence within the rapidly evolving cross-chain DeFi landscape. In appreciation of this opportunity, we propose a revenue-sharing model to ensure mutual benefit from this collaboration.

As Aave continues to explore areas like off-chain collateral and new developments such as GHO, projects like Superlend have the opportunity to add value and drive the adoption of Aave’s technology. Our proposal to deploy an Aave V3 fork on Etherlink and Arbitrum represents a strategic opportunity to extend Aave’s influence within the rapidly evolving cross-chain DeFi landscape. In appreciation of this opportunity, we propose a revenue-sharing model to ensure mutual benefit from this collaboration.

Specification

Market Deployment

• Aave V3 Codebase: We will deploy Superlend money markets on Etherlink and Arbitrum using the Aave V3 codebase. For the Arbitrum deployment, we plan to focus exclusively on ETH and ETH-correlated assets, similar to Aave’s Lido instance on Ethereum. Additionally, there could be a second market on Arbitrum dedicated to USDC or similar assets to support our cross-chain liquidity management feature, which would use the Aave Portal feature. These markets will operate independently from our aggregator platform but will be fully integrated within the Superlend ecosystem. These deployments are integral to both our goal of launching innovative Superlend markets and our broader strategy to integrate the existing Aave V3 markets deployed by the Aave DAO across the EVM ecosystem (e.g., on Ethereum and Polygon) into our aggregator.

  • Test our proposed deployment that we have live on Etherlink testnet here.
  • Find the addresses of our deployed contracts on the testnet here.

• Revenue Sharing: We propose sharing 15% of the revenue generated from these markets with the Aave DAO, provided that our quarterly revenue exceeds $200,000. These contributions will be made on a quarterly basis.

Governance and Risk Management

• Governance Model: Initially, the markets will be governed through a 5/8 multi-sig model. As the project matures, we plan to transition to a more decentralized governance structure, aligning with the principles of Aave’s governance model.

• Risk Management: We have partnered with ChainRisk for continuous risk parameter tuning and will onboard additional partners as needed to ensure comprehensive risk management for these markets.

Disclaimer

Superlend is independently proposing this TEMP CHECK and is not compensated by any third party for creating or submitting this proposal. However, as participants in the Etherlink accelerator, we are launching a product on Etherlink. For the Superlend project, we have raised an undisclosed investment and secured an undisclosed liquidity commitment to support the development and launch.

Next Steps

1. We welcome feedback from the Aave community on this TEMP CHECK proposal.
2. If consensus is reached, we will escalate this proposal to the Snapshot stage for a formal vote.
3. If consensus is reached on the snapshot, escalate this proposal to the ARFC stage.
4. If consensus is reached on the ARFC, escalate the proposal to the Snapshot stage.
5. If the Snapshot outcome is favorable, we will proceed with the deployment of Superlend markets on Etherlink and Arbitrum, adhering to the revenue-sharing and governance commitments outlined.

Copyright

Copyright and related rights waived via CC0.

[EzR3aL]

Hi and thank you for your proposal.
Could you answer a few questions to me.

• Whats the goal of Superlend to be a friendly fork? Do you expect something in return from the DAO? If yes, what would it be?
• Would you be up to airdrop token to StkAave holder to further create synergies between Aave and Superlend? Especially when there will be a DAO created. (I have seen there will be a TGE)
• Before Superlend there was Plend. Whats the reason behind the name change? As I understood Plend can already be used (at least in testnet) and already looks like an Aave v3 fork. You haven’t asked for Plend to be a friendly fork, right?

[berndoostrum]

Hi @EzR3aL, thanks for taking the time to read our proposal and for your thoughtful questions. Let me address them one by one:

What’s the goal of Superlend to be a friendly fork? Do you expect something in return from the DAO? If yes, what would it be?

The primary reason we want Superlend to be a friendly fork is out of respect and goodwill towards the Aave community. Since we are using the Aave V3 codebase, we believe it’s only fair and appropriate to seek the Aave DAO’s blessings before launching our deployment. By doing so, we hope to establish a foundation for future collaboration and to engage with the Aave community, which has a wealth of experience in the lending space. A friendly fork sets the right tone for potential collaborations, future innovations, and for seeking feedback on our ideas from a community that has been at the forefront of DeFi lending.

We do not expect anything in return from the DAO. Our primary ask is for feedback and a chance for the community to review our deployment. If possible, we would also appreciate it if the community could try out our aggregator once it’s live, especially since it will feature full integration with all Aave markets.

Would you be up to airdrop tokens to StkAave holders to further create synergies between Aave and Superlend? Especially when there will be a DAO created.

Yes, we would be open to the idea of an airdrop to StkAave holders to foster closer ties between Aave and Superlend. While the specifics would need to be carefully structured, we see no reason why this couldn’t be a viable option. However, it’s important that this initiative is supported by the majority of the Aave community and is done with a sense of goodwill from all parties involved.

Before Superlend there was Plend. What’s the reason behind the name change? As I understood Plend can already be used (at least in testnet) and already looks like an Aave V3 fork. You haven’t asked for Plend to be a friendly fork, right?

Plend was a product that emerged from our previous identity Plenty, which we used to build DeFi products on Tezos over the last five years. We’ve built and maintained various products on Tezos, including CDP-based synthetic assets, concentrated liquidity AMMs, ve(3,3) AMMs, and bridges, with a strong focus on security and reliability.

When we first started experimenting with an Aave V3 fork, we were still in the early stages and using the Plend brand as a convenient placeholder. All our previous products on Tezos used the “Plenty” branding, which included purple colors and other design elements. It was easy and efficient to simply cut off the “t and y” and replace it with a “d” to quickly get to a PoC without investing heavily in branding.

However, when we decided to venture seriously into the EVM landscape, we felt it was important to start with a fresh identity and broader appeal. We revisited our branding, style guide, and put more thought into our marketing, adoption strategies, and alignment with the larger EVM ecosystem. This rebranding exercise was a natural step for us as we are committed to making a significant impact in this space.

As a result, we transitioned from Plend to Superlend. Plend is no longer active, and Superlend represents our entry into the lending infrastructure space within the EVM ecosystem. We believe this new identity better reflects our ambitions and commitment to building something great in the DeFi lending sector.

[SaucyBlock]

Hello @berndoostrum , and welcome to the Aave community.

I have two questions regarding your proposal:

1. How did you calculate the 15% figure you proposed for the revenue distribution rate?

2. You’ve set a condition that “quarterly revenue exceed $200,000” for revenue distribution. What is the reason for including this condition?

[berndoostrum]

Hi @SaucyBlock,

Thank you for the warm welcome and your questions. I’m happy to provide some clarity on our proposal:

How did you calculate the 15% figure you proposed for the revenue distribution rate?

We reviewed similar proposals within the Aave DAO forum, such as the Sparklend proposal with a 10% profit share and the RealT Markets proposal with 20%. We chose 15% as a balanced rate that would allow us to contribute meaningfully to the Aave DAO while ensuring our ability to sustain and grow Superlend. Given that Etherlink is a new L2, we anticipate some initial scaling challenges, making the $200K quarterly revenue threshold ambitious but necessary for sustainable growth.

You’ve set a condition that “quarterly revenue exceed $200,000” for revenue distribution. What is the reason for including this condition?

The $200K quarterly revenue threshold is essential to ensure we can effectively scale our marketing, product development, and team. This figure represents the revenue level needed to sustain our operations and support growth. Once we reach this threshold, we can comfortably allocate 15% to the Aave DAO. The threshold allows us to reinvest in the project, driving sustainable growth while still providing value to the Aave community.

[berndoostrum]

Thank you all for your feedback and engagement with our proposal. We’ve carefully considered the input we’ve received and believe the proposal is ready for the next step.

As outlined in our proposal, we will be moving this to the Snapshot stage for a formal vote. We encourage the community to participate in the vote and share their support or concerns.

We look forward to continuing to work closely with the Aave community as we move forward.

[ACI]

After the requisite forum discussion period, this proposal has been escalated to Snapshot stage for voting. We encourage everyone to participate.

[ACI]

After Snapshot monitoring, the current Snapshot recently ended, reaching both Quorum and YAE as winning option with 781000 votes.

Next step will be the publication of an ARFC.