Lido Ethereum Instance Activation
01Summary
This proposal activates a new Aave V3 instance on Ethereum dedicated to the Lido Alliance, specifically designed to support wstETH and WETH with leverage looping capabilities. The instance includes a high-LTV eMode category (93.50% LTV) for ETH correlated assets, will be bootstrapped with wETH liquidity from the Ahab program, and includes 15,000 GHO as a service fee for deployment.
- Type
- protocol addition
- Funding
- $15000
Key changes
- Deploy new Aave V3 instance on Ethereum for Lido Alliance with wstETH and WETH as only assets(high)
- Create eMode category for ETH correlated assets with 93.50% LTV and 95.50% LQT(high)
- List wstETH with 80% LTV, 81% LT, and 6% liquidation bonus(high)
- List WETH with 82% LTV, 83% LT, and 5% liquidation bonus(high)
- Set ACI as emission admin for WETH and aWETH rewards for LM program(medium)
- Set CapsPlusRisk Steward contract as Risk Admin with ACI as administrator(medium)
- Bootstrap instance with wETH liquidity from Ahab program(medium)
- Set PROTOCOL_GUARDIAN as temporary Pool Admin(low)
Notable concerns
- High LTV of 93.50% in eMode carries significant liquidation risk for leveraged stETH loopers
- Aggressive risk parameters with 12,000 wstETH borrow cap and high 85% slope 2 rate may lead to capital inefficiency
- Temporary Pool Admin role requires future governance action to set permanent admin
- Reliance on Lido's incentive programs to bootstrap liquidity creates dependency on external incentives
Generated by Kvorum
02Description
Simple Summary
This AIP proposal activates the Ethereum Lido V3.1 instance, as discussed in [ARFC] Deploy a Lido Aave v3 Instance.
Motivation
Aave and Lido have historically seen symbiotic growth, with stETH being one of the premier collaterals on Aave and leveraged staking being one of the most profitable use cases for both Aave DAO and Lido users.
Lido is in the process of launching the Lido Alliance, which will reward novel use cases of staked ETH and support further growth of the Lido ecosystem. This ARFC proposal suggests that Aave supports Lido Alliance efforts by deploying a new Aave V3 ETH market for Lido. This Aave v3 instance will be designed and tuned to support stETH leverage loopers. The deployment will only include wstETH and wETH assets with E-Mode enabled.
Lido has committed incentive programs and ecosystem support for this instance in order to bootstrap liquidity and promote additional programs within the Lido Alliance.
This instance will be bootstrapped with wETH from the Ahab program to attract wETH liquidity.
wETH suppliers will also be proposed to be eligible to a dedicated Merit Boost
Specification
The Lido Alliance’s Aave v3 instance payload implements the following:
-
Pre-execution:
- Sets Ethereum V3 Incentives Controller to manage Ethereum Lido incentives.
- Register Ethereum Lido instance in Ethereum V3 PoolAddressesProviderRegistry.
-
Execution:
-
Add eMode category for ETH correlated assets:
- LTV: 93.50%
- LQT: 95.50%
- LiqBonus: 1%
- Oracle: Not set
- Label : 'Eth correlated'
-
Listing of wstETH and WETH tokens.
The table below illustrates the configured risk parameters for wstETH and WETH tokens.
-
| Parameter | wstETH | WETH |
|---|---|---|
| Isolation Mode | false | false |
| Borrowable | ENABLED | ENABLED |
| Collateral Enabled | true | true |
| Supply Cap (wstETH) | 650,000 | 900,000 |
| Borrow Cap (wstETH) | 12,000 | 810,000 |
| Debt Ceiling | USD 0 | USD 0 |
| LTV | 80 % | 82 % |
| LT | 81 % | 83 % |
| Liquidation Bonus | 6 % | 5 % |
| Liquidation Protocol Fee | 10 % | 10 % |
| Reserve Factor | 5 % | 10 % |
| Base Variable Borrow Rate | 0 % | 0 % |
| Variable Slope 1 | 3.5 % | 2.5 % |
| Variable Slope 2 | 85 % | 85 % |
| Uoptimal | 45 % | 90 % |
| Stable Borrowing | DISABLED | DISABLED |
| Stable Slope1 | 0 % | 0 % |
| Stable Slope2 | 0 % | 0 % |
| Base Stable Rate Offset | 0 % | 0 % |
| Stable Rate Excess Offset | 0 % | 0 % |
| Optimal Stable To Total Debt Ratio | 0 % | 0 % |
| Flashloanable | ENABLED | ENABLED |
| Siloed Borrowing | DISABLED | DISABLED |
| Borrowable in Isolation | DISABLED | DISABLED |
| Oracle | 0xB4aB0c94159bc2d8C133946E7241368fc2F2a010 | 0x5f4eC3Df9cbd43714FE2740f5E3616155c5b8419 |
- Post-execution:
- Set Ethereum PROTOCOL_GUARDIAN as temporary Pool Admin of Ethereum Lido instance.
- Set Risk Admin to CapsPlusRisk Steward contract, with ACI as admin of this steward that can bump caps with a delay of 2 days per cap update.
- Set ACI as emission admin of WETH and aWETH rewards for LM program.
- Seed initial wstETH and WETH token liquidity for security measures.
- Send 15.000 GHO as service fee for Catapulta deployment service provider.
References
- Implementation: payload
- Permissions: Lido Instances Permissions Table
- Tests: AaveV3EthereumLido
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal contains a single decoded on-chain action: a parameterless call to execute() on a dedicated payload contract. This is the standard Aave governance pattern in which all detailed logic (asset listings, eMode configuration, risk parameter setting, admin role assignments, fee transfers, etc.) is encoded in the payload contract's bytecode and executed via delegatecall, rather than being passed as calldata arguments visible to this analysis. Because the decoded action exposes no parameters, it is not possible to directly cross-verify the specific numeric values (LTV, LT, caps, eMode parameters, GHO fee amount, etc.) or addresses described in the prose against the calldata. No red flags are apparent: the single action's target and function signature (execute()) are consistent with the described payload deployment referenced in the linked implementation and test files, and there is no evidence of the calldata doing something different from what is described (e.g., no unexplained transfers or admin grants outside what execute() would perform per the described payload). Given the inherent opacity of this delegatecall pattern, confidence in a granular value-by-value comparison is low, so per instructions this analysis is recorded as low confidence and treated as consistent rather than surfaced as a warning.“discrepancies”:[]}. (placeholder text removed)
Generated by Kvorum
04Actions
- Target
- 0x683f…58ab
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
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