Increase Bridged USDC Reserve Factor Across All Deployments
01Summary
This proposal increases Reserve Factors (RF) for bridged USDC across multiple chains (Arbitrum, Optimism, Polygon, Base) from 20% to 25%, increases RF for key assets on Ethereum V2 (DAI, LINK, USDC, USDT, WBTC, WETH) by 5%, increases RF for stablecoins on Polygon V2 to 99.99%, and adjusts Polygon V2 borrow rates. The goal is to make native USDC more attractive, encourage migration from V2 to V3, and increase treasury revenue without affecting user fund safety or borrowing rates.
- Type
- parameter change
Key changes
- Increase Reserve Factor for bridged USDC.e on Polygon, Optimism, Arbitrum, and Base V3 from 20% to 25%(high)
- Increase Reserve Factor for DAI, USDC, USDT, WETH on Ethereum V2 by 5% (55% to 60%)(high)
- Increase Reserve Factor for LINK and WBTC on Ethereum V2 by 5% (60% to 65%)(high)
- Increase Reserve Factor for DAIe, USDCe, USDTe, WAVAX, WETHe on Avalanche V2 by 5% (50% to 55%)(high)
- Increase Reserve Factor for WBTCe on Avalanche V2 by 5% (55% to 60%)(high)
- Increase Reserve Factor for DAI, USDC, USDT on Polygon V2 to 99.99% (from 96-98%)(high)
- Increase Polygon V2 borrow rate Slope1 for DAI and USDT from 9.75% to 11.25%(medium)
- Increase Polygon V2 borrow rate Slope1 for wBTC and wETH from 4.75% to 6.25%(medium)
Notable concerns
- High Reserve Factors on Polygon V2 (99.99%) may significantly reduce deposit yields and could drive users away from the platform
- This is part of a series of proposals with future fortnightly RF adjustments planned, creating ongoing governance overhead
- The measures aim to deprecate V2 deployments, which may negatively impact users still on V2 platforms
Generated by Kvorum
02Description
Simple Summary
This AIP is composed of three actions:
- To start periodically increasing the Reserve Factor (RF) for Bridged USDC(USDC.e & USDbC) across Arbitrum, Optimism, Polygon and Base Aave deployments.
- A continuation of the proposals on Governance V3 that increases the Reserve Factor (RF) for assets on Ethereum V2, Avalanche V2, and Polygon V2 by 5.00%, up to a maximum of 99.99%.
- A continuation of the proposal to adjust Polygon v2 Borrow Rate.
Motivation
Presently, Bridged USDC (USDC.e & USDbC) competes with native USDC on the listed markets. By gradually increasing the RF for Bridged USDC(USDC.e & USDbC), the deposit rate on these markets will become less attractive over time. Similar to other proposals, this action is expected to encourage users to switch to native USDC on the respective market.
Upon implementing this proposal, a subsequent AIP will be submitted that increases the RF by 5.00% up to a maximum of 99.99% every 2 weeks, subject to market conditions. The RF amendments will be incorporated into the fortnightly RF and Borrow Rate adjustment AIP to reduce voting overhead.
This AIP will also reduce deposit yield for assets on Ethereum, Avalanche, and Polygon V2 deployments by increasing the RF. With this upgrade being passed, users will be further encouraged to migrate from Ethereum V2 to V3.
Increasing the RF routes a larger portion of the interest paid by users to Aave DAO's Treasury. User's funds are not at risk of liquidation and the borrowing rate remains unchanged.
Specification
| Market | Asset | Current RF | New RF |
|---|---|---|---|
| Polygon V3 | USDC.e | 20% | 25% |
| Optimism V3 | USDC.e | 20% | 25% |
| Arbitrum V3 | USDC.e | 20% | 25% |
| Base V3 | USDC.e | 20% | 25% |
| Ethereum V2 | DAI | 55% | 60% |
| Ethereum V2 | LINK | 60% | 65% |
| Ethereum V2 | USDC | 55% | 60% |
| Ethereum V2 | USDT | 55% | 60% |
| Ethereum V2 | WBTC | 60% | 65% |
| Ethereum V2 | WETH | 55% | 60% |
| Avalanche V2 | DAIe | 50% | 55% |
| Avalanche V2 | USDCe | 50% | 55% |
| Avalanche V2 | USDTe | 50% | 55% |
| Avalanche V2 | WAVAX | 50% | 55% |
| Avalanche V2 | WBTCe | 55% | 60% |
| Avalanche V2 | WETHe | 50% | 55% |
| Polygon V2 | DAI | 96% | 99.99% |
| Polygon V2 | USDC | 98% | 99.99% |
| Polygon V2 | USDT | 97% | 99.99% |
| Market | Asset | Current Slope1 | New Slope1 |
|---|---|---|---|
| Polygon V2 | DAI | 9.75% | 11.25% |
| Polygon V2 | USDT | 9.75% | 11.25% |
| Polygon V2 | wBTC | 4.75% | 6.25% |
| Polygon V2 | wETH | 4.75% | 6.25% |
| Polygon V2 | wUSDC | 9.75% | 11.25% |
| Polygon V2 | wMATIC | 4.75% | 8.25% |
References
- Implementation: AaveV2Avalanche,AaveV2Ethereum,AaveV2Polygon,AaveV3Polygon,AaveV3Optimism, AaveV3Arbitrum, AaveV3Base
- Tests: AaveV2Avalanche,AaveV2Ethereum,AaveV2Polygon,AaveV3Polygon,AaveV3Optimism, AaveV3Arbitrum, AaveV3Base
- Snapshot for USDCe updates
- Discussion for USDCe updates
- Discussion for Ethereum V2 Reserve Factor Updates
- Snapshot for Ethereum V2 Reserve Factor Updates
- Discussion for Avalanche V2 Reserve Factor Updates
- Snapshot for Avalanche V2 Reserve Factor Updates
- Discussion for Polygon V2 Borrow Rate Updates
- Snapshot for Polygon V2 Borrow Rate Updates
- Discussion for Polygon V2 RF update
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
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04Actions
- Target
- 0x74b4…2a1c
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
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07Forum
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