Reserve Factor Updates Late August
01Summary
This proposal adjusts Aave protocol parameters across multiple networks to encourage user migration from v2 to v3 instances: increasing Slope1 by 75bps on Polygon v2 (raising borrowing costs), increasing Reserve Factor by 5% on Ethereum v2 and Avalanche v2 (reducing deposit yields and directing more revenue to Aave DAO), and increasing Reserve Factor by 5% on bridged USDC variants across Arbitrum, Optimism, Polygon, Base, and Gnosis to promote migration to native USDC.
- Type
- parameter change
Key changes
- Increase Slope1 parameter by 75 basis points on Polygon v2 for DAI, USDT, USDC (12.75% to 13.50%), wBTC and wETH (7.75% to 8.50%), and wMATIC (9.75% to 10.50%)(high)
- Increase Reserve Factor by 5% on Ethereum v2 for DAI, USDC, USDT, wETH (70% to 75%) and LINK, wBTC (75% to 80%)(high)
- Increase Reserve Factor by 5% on Avalanche v2 for DAI.e, USDC.e, USDT.e, wAVAX, wETH.e (65% to 70%) and wBTC.e (70% to 75%)(high)
- Increase Reserve Factor by 5% on bridged USDC.e across Arbitrum, Optimism, and Polygon (35% to 40%) and USDbC on Base (35% to 40%), plus USDC.e on Gnosis (10% to 15%)(medium)
Notable concerns
- Users on Ethereum v2 and Avalanche v2 will experience reduced deposit yields, which may incentivize unintended market behavior
- Increased Slope1 on Polygon v2 raises borrowing costs for all users, not just those migrating
- The changes do not affect borrowing rates directly, only deposit rates and capital costs
Generated by Kvorum
02Description
Simple Summary
This AIP shall implement the following parameter adjustments:
- Increase Slope1 across Polygon v2 by 75bps;
- Increase Reserve Factor (RF) on Ethereum v2 and Avalanche v2 by 5.00%; and,
- Increase USDC.e and USDbC RF by 5.00% on Arbitrum, Optimism, Polygon, and Base.
Motivation
This AIP will reduce deposit yield for assets on Ethereum v2 and Avalanche v2 instances of Aave Protocol by increasing the RF by 5.00%. By increasing the RF a greater portion of the interest paid by borrowers is directed to the Aave DAO's treasury.
This results in a lower deposit rate for users and encourages migration from v2 instances of the Aave Protocol to v3. User's funds are not at risk of liquidation and the borrowing rate remains unchanged.
The RF across all USDC.e and USDbC reserves will be increased by 5.00% to encourage migration from bridged USDC to native USDC on each respective network.
By increasing the Slope1 parameter by 75bps on Polygon v2, the cost of capital to users increases and further encourages migration to Polygon v3.
Specification
Slope1 Parameter 75bps Increases:
| Asset | Market | Current Slope1 | Proposed Slope1 |
|---|---|---|---|
| DAI | Polygon v2 | 12.75% | 13.50% |
| USDT | Polygon v2 | 12.75% | 13.50% |
| wBTC | Polygon v2 | 7.75% | 8.50% |
| wETH | Polygon v2 | 7.75% | 8.50% |
| USDC | Polygon v2 | 12.75% | 13.50% |
| wMATIC | Polygon v2 | 9.75% | 10.50% |
Reserve Factor 5.00% Increases:
| Asset | Market | Current RF | Proposed RF |
|---|---|---|---|
| DAI.e | Avalanche v2 | 65.00% | 70.00% |
| USDC.e | Avalanche v2 | 65.00% | 70.00% |
| USDT.e | Avalanche v2 | 65.00% | 70.00% |
| wAVAX | Avalanche v2 | 65.00% | 70.00% |
| WBTC.e | Avalanche v2 | 70.00% | 75.00% |
| WETH.e | Avalanche v2 | 65.00% | 70.00% |
| DAI | Ethereum v2 | 70.00% | 75.00% |
| LINK | Ethereum v2 | 75.00% | 80.00% |
| USDC | Ethereum v2 | 70.00% | 75.00% |
| USDT | Ethereum v2 | 70.00% | 75.00% |
| wBTC | Ethereum v2 | 75.00% | 80.00% |
| wETH | Ethereum v2 | 70.00% | 75.00% |
| USDC.e | Arbitrum | 35.00% | 40.00% |
| USDC.e | Optimism | 35.00% | 40.00% |
| USDC.e | Polygon | 35.00% | 40.00% |
| USDbC | Base | 35.00% | 40.00% |
| USDC.e | Gnosis | 10.00% | 15.00% |
References
- Implementation: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis
- Tests: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis
- Discussion for USDCe updates
- Snapshot 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
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal follows Aave's standard governance execution pattern: the on-chain action decoded here is a single, parameterless execute() call to a payload contract on Ethereum mainnet. This is the typical structure for Aave AIPs, where the actual granular logic (setting Slope1 and Reserve Factor values across the listed v2/v3 markets on multiple chains) lives inside the payload contract's execute() function and is not separately decoded into individual calldata rows here. The description's implementation links point to per-chain payload contracts (AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis) consistent with a single top-level execute() dispatching to these. Because the decoded calldata only exposes the top-level execute() call and not the internal parameter-setting calls, I cannot directly verify each individual basis-point or percentage change against calldata values. However, this is expected and standard for this proposal type, so I do not flag it as a discrepancy - there is no evidence of a target mismatch, omitted action, or value mismatch beyond what the standard execution pattern implies. Confidence is medium because the lack of granular decoded sub-calls limits certainty, but the overall structure matches the expected pattern with no red flags such as unexpected recipients, extra transfers, or control changes.
Generated by Kvorum
04Actions
- Target
- 0xae1b…b0ce
- 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.
08Similar proposals
- aaveexecutedReserve Factor Updates Late September100%
- aaveexecutedReserve Factor Updates Mid October100%
- aaveexecutedReserve Factor Updates Mid July99%
- aaveexecutedReserve Factor Updates August99%
- aaveexecutedIncrease Bridged USDC Reserve Factor Across All Deployments95%
- aaveexecutedReserve Factor Updates89%
- aaveexecutedReserve Factor Updates89%
- aaveexecutedReserve Factor Upgrades88%
- aaveexecutedReserve Factor Upgrades88%
- aaveexecutedPolygon V2 Reserve Factor Updates & Interest Rate Increases87%