Caps Risk Oracle Activation on Arbitrum
01Summary
Activate automated Aave Generalized Risk Stewards (AGRS) system on Arbitrum to automatically update supply and borrow caps for 15 whitelisted assets (WETH, USDC, USDT, WBTC, DAI, weETH, ARB, USDC.e, GHO, LINK, wstETH, LUSD, FRAX, rETH, AAVE) based on risk recommendations from Chaos Labs Edge infrastructure, with built-in safeguards limiting changes to 30% per update with 3-day minimum delays.
- Type
- protocol addition
Key changes
- Deploy AaveStewardCapsInjector middleware contract on Chainlink Automation to propagate supply and borrow cap recommendations from Edge Risk Oracle to AGRS contract with permissionless execution(high)
- Grant RiskAdmin role to new RiskSteward instance enabling automated cap updates for whitelisted assets(high)
- Configure AGRS parameters allowing maximum 30% relative change per update with 3-day minimum delay between updates for both supply and borrow caps(high)
- Whitelist 15 specific assets for automated cap management with enforcement at AaveStewardCapsInjector level(high)
- Register AaveStewardCapsInjector on Chainlink Automation using 50 LINK from Arbitrum Collector(medium)
Notable concerns
- System relies on timely and accurate risk recommendations from Chaos Labs Edge infrastructure
- Permissionless middleware execution assumes Edge Risk Oracle provides correctly-timed updates
- Automated changes apply only to 15 pre-whitelisted assets, limiting flexibility for other assets
- 3-day minimum delay and 30% change caps provide safeguards but may slow response to rapidly changing market conditions
Generated by Kvorum
02Description
Simple Summary
This proposal activates the automated Aave Generalized Risk Stewards (AGRS) system on the Arbitrum Instance to perform automated supply and borrow cap updates. Under the hood, the AGRS consumes risk recommendations from the Edge infrastructure by Chaos Labs.
Motivation
The current implementation of manual AGRS allows for the periodic manual updating of Supply and Borrow caps, generally performed in response to market demand. The high volume of updates, combined with the manual triggering of supply and borrow cap simulations, written analyses, and coordination across multiple service providers, often leads to delays in implementing cap increases. These delays can hinder potential growth opportunities for underlying assets that might otherwise contribute significantly, but more importantly, they create overhead to have tighter risk configurations and dynamism.
This new component of AGRS follows the example of interest rate updates for WETH on v3 Prime Ethereum (this proposal, in production for some time.
Specification
The automated AGRS will use another instance of AGRS (exactly the same codebase as the other model), but with the following constraints:
- This instance will only have configurable caps-related parameters: supplyCap and borrowCap.
- Recommendations of these parameters will be submitted to a RiskOracle smart contract, from the Edge off-chain infrastructure.
- Between the risk oracle smart contract and the AGRS contract, there will be a very thin middleware AaveStewardCapsInjector, which will have the following logic:
- Will take recommendations from the Edge Risk Oracle side and propagate them to the AGRS contract.
- Enforce that only the whitelisted asset can be acted upon.
- Given the protections (percentage constraints and time delay) on the AGRS side and that it is an assumption that risk recommendation will be timing correct updates on the Edge Risk Oracle, the propagation will be permissionless.
The AaveStewardCapsInjector middleware, technically being part of the Aave Robot infrastructure, will run on Chainlink Automation and will be registered using the AaveCLRobotOperator contract with 50 LINK from the Arbitrum Collector.
The new instance of the RiskSteward will be given the RiskAdmin role with the following method: ACL_MANAGER.addRiskAdmin()
Please note that only the following assets on Arbitrum instance have been whitelisted for automatic AGRS system, enforced strictly on the AaveStewardCapsInjector contract: WETH, USDC, USDT, WBTC, DAI, weETH, ARB, USDC.e, GHO, LINK, wstETH, LUSD, FRAX, rETH, AAVE
AGRS
The automated AGRS system will be configured with the following params:
| Parameter | Percent change allowed | minimumDelay |
|---|---|---|
| Supply Cap | 30% (relative change) | 3 days |
| Borrow Cap | 30% (relative change) | 3 days |
Edge Risk Oracle
The methodology used by the Edge Risk Oracle to suggest cap updates is described on the governance forum here.
References
- Implementation: Payload
- Tests: Payload, AaveStewardsInjectorCaps, EdgeRiskStewardCaps
- Snapshot
- Discussion
- AaveStewardsInjectorCaps: github, deployed-contract
- EdgeRiskStewardCaps: github, deployed-contract
- EdgeRiskOracle: github, deployed-contract
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
A calldata-vs-description analysis is not generated yet. Review the decoded actions →
04Actions
This proposal carries no on-chain actions.
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
08Similar proposals
- aaveexecutedCaps Risk Oracle Activation on Base, Avalanche93%
- aaveexecutedAutomated (Edge) AGRS Activation89%
- aaveexecutedCaps Risk Oracle Activation on Optimism, BNB, Gnosis, Polygon88%
- aaveexecutedAave Generalized Risk Stewards (AGRS) activation86%
- aaveexecutedSlope2 Risk Oracle Activation On Core Ethereum, Linea83%
- aaveexecutedDiscount Rate Risk Oracle Activation and update manual AGRS82%
- aaveexecutedCaps Plus Risk Steward81%
- aaveexecutedActivate Capo Risk Agent and expand Rates Agent on more networks79%
- aaveexecutedAGRS (Risk Stewards) migration to Risk Agents78%
- aaveexecutedRisk Stewards Cooldown Reduction & Umbrella Pauser Role Reassignment75%