KVORUM
aaveSource: Aave governance v3 · #15

Aave V1 Deprecation

executedFeb 5, 2024, 08:37 AM UTCbyF70xf71f…1e02

01Summary

AISummary by Kvorumclaude-haiku-4-5

Upgrade Aave v1 protocol to accelerate its deprecation by reducing interest rates to near-zero, enabling liquidations of healthy positions with 1% bonus and 100% close factor, and disabling flashloans. This aims to reduce operational overhead for the DAO by incentivizing user withdrawals from the outdated protocol instance.

Type
protocol deprecation

Key changes

  • Reduce interest rates to minimal values (0% base with 1-2% slopes) across all Aave v1 assets to incentivize user withdrawals(high)
  • Allow liquidation of collateralized positions with fixed 1% liquidation bonus instead of standard rates(high)
  • Enable 100% close factor for liquidations to allow full position liquidation(high)
  • Disable flashloans functionality on Aave v1(medium)
  • Upgrade lending pool logic and liquidation manager implementations(high)

Notable concerns

  • Users with active positions on Aave v1 will face liquidation risk with minimal warning as healthy positions become liquidatable
  • The forced migration mechanism through rate changes and liquidation changes may negatively impact users who have not yet moved their funds
  • Aave v1 architecture differences from v2/v3 require specialized monitoring and security review resources during this deprecation process
ContractsADDRESSES_PROVIDERLIQUIDATION_MANAGER_IMPLPOOL_IMPLCONFIGURATORInterestRateStrategy (all assets)
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

244 words

Simple Summary

Approve further steps of Aave v1 off-boarding, to reduce operational overhead on deprecated Aave instances. Therefore the proposal suggests to upgrade the pool logic to allow liquidation of healthy positions with a fixed 1% bonus, amongst other measures.

Motivation

The Aave protocol v1 was released in January 2020 and eventually superseded by Aave protocol v2 in December on the same year.

While Aave v1 has been deprecated for a long time, some liquidity is still stuck on the protocol 1. Even if this instance is not covered by the Aave Safety Module, being part of Aave, it still is monitored and evaluated whenever development and/or security decisions are made.

This creates meaningful overhead for all involved development & security teams, which directly adds cost to the Aave DAO. Additionally, the architecture of Aave v1 is quite different to Aave v2 & v3, making it the most ad-hoc instance of Aave.

Specification

The proposal contract calls:

  • ADDRESSES_PROVIDER.setLendingPoolLiquidationManager(LIQUIDATION_MANAGER_IMPL);
  • ADDRESSES_PROVIDER.setLendingPoolImpl(POOL_IMPL);
  • CONFIGURATOR.setReserveInterestRateStrategyAddress(IR); on all assets where IR is a InterestRateStrategy with 0% base and 1%/2% slopes

to update the implementations accordingly.

This upgrade will:

  • reduce the interest rates to a minimal value to incentivize withdrawals
  • allow liquidations of collateralized positions with 1% liquidation bonus
  • allow liquidations with 100% close factor
  • disable flashloans

References

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

AIMismatch analysis by Kvorum

A calldata-vs-description analysis is not generated yet. Review the decoded actions →

04Actions

1 total
#0fallback()chain 0x1
Target
0xa497…4005
Value
0 wei
Function
fallback()
Arguments
{}
Calldata

05Tally

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Outcome (current)—
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06Voters

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07Forum

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