Full Deprecation of DPI Across Aave Deployments
01Summary
This proposal finalizes the deprecation of DPI (DeFi Pulse Index) across Aave by adjusting risk parameters, reducing interest rates to discourage further borrowing, and replacing Chainlink's deprecated price feed with fixed-price alternatives ($102 USD on Polygon v3, 0.022767 ETH on Ethereum v2 and Polygon v2) to maintain accurate valuation for the small number of remaining positions.
- Type
- parameter change
Key changes
- Set Liquidation Threshold on Polygon v3 from 45% to 0.05%, expected to trigger one minor liquidation of ~$2.5K notional(high)
- Increase Base Interest Rate on Polygon v3 from 0% to 20% to encourage debt repayment(high)
- Increase Base Interest Rate on Ethereum v2 to 20% to encourage debt repayment(high)
- Reduce Slope 2 parameter from 300% to 40% on both Polygon v3 and Ethereum v2 to avoid excessive reserve inflation(medium)
- Replace Chainlink DPI/USD feed with fixed price feed at $102 USD on Polygon v3(high)
- Replace Chainlink DPI/ETH feed with fixed price feed at 0.022767 ETH on Ethereum v2(high)
- Replace Chainlink DPI/ETH feed with fixed price feed at 0.022767 ETH on Polygon v2(high)
Notable concerns
- DPI has been frozen across all instances with no new deposits or borrows permitted for an extended period
- Chainlink is deprecating the DPI price feed due to reduced stability and limited data availability
- Transition to fixed-price feeds represents a departure from oracle-based pricing and may not reflect market conditions
- Liquidation threshold reduction to 0.05% on Polygon v3 will trigger immediate liquidation of ~$2.5K in positions
Generated by Kvorum
02Description
Simple Summary
This proposal outlines the final deprecation path for DPI (DeFi Pulse Index) across all Aave deployments where it remains listed: Ethereum v2, Polygon v2, and Polygon v3. DPI has been frozen across all instances for an extended period and now represents negligible exposure within the protocol.
The currently utilized DPI price feed has exhibited reduced stability and is scheduled for deprecation by Chainlink; it is thus timely for Aave to conclude DPI's lifecycle by adjusting its risk parameters and implementing a simplified valuation approach that maintains accurate accounting for the small number of remaining positions.
Motivation
DPI has been frozen across all Aave instances for an extended period, with no new deposits or borrows permitted. Usage has steadily declined, and its residual exposure is now negligible across the protocol. Current positions are concentrated among a handful of users, with no material systemic or market risk implications.
Recently, Chainlink has indicated its intention to deprecate the DPI price feed due to reduced stability and limited data availability. Given that DPI's trading activity and liquidity have declined significantly, maintaining this feed is no longer viable from an oracle operations standpoint. This development necessitates an internal Aave decision on how to handle valuation of the remaining DPI positions once the feed is sunset.
To address this, the following proposal outlines a minimal-risk approach to finalizing DPI's deprecation across all Aave deployments while ensuring continuity for existing users.
Specification
To finalize deprecation, the following adjustments are proposed:
- Set Liquidation Threshold (LT) to 0.05% on Polygon v3 (note: triggers one minor liquidation, ~$2.5K notional)
- Adjust Interest Rate Parameters (Polygon v3 and Ethereum v2):
- Base rate: 20% (to encourage baseline debt repayment)
- Slope 2: 40% (reduced from 300%) to avoid excessive reserve inflation on residual balances
| Asset | Instance | Current Liquidation Threshold | Recommended Liquidation Threshold | Current Base Interest Rate | Recommended Base Interest Rate | Current Slope2 | Recommended Slope2 |
|---|---|---|---|---|---|---|---|
| DPI | Ethereum v2 | - | - | - | - | 300% | 40% |
| DPI | Polygon v3 | 45% | 0.05% | 0% | 20% | 300% | 40% |
Following the deprecation of Chainlink DPI feeds, the price feeds for DPI will be updated to a fixed equivalent of $102 across all instances:
| Asset | Instance | Current Price Feed | New Price Feed | New Fixed Price Value |
|---|---|---|---|---|
| DPI | Ethereum v2 | CL DPI/USD/ETH | Fixed DPI/ETH | 0.022767 ETH |
| DPI | Polygon v2 | CL DPI/ETH | Fixed DPI/ETH | 0.022767 ETH |
| DPI | Polygon v3 | CL DPI/USD | Fixed DPI/USD | 102 USD |
References
- Implementation: AaveV2Ethereum, AaveV2Polygon, AaveV3Polygon
- Tests: AaveV2Ethereum, AaveV2Polygon, AaveV3Polygon
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal description is detailed and internally consistent, listing specific parameter changes (LT to 0.05% on Polygon v3, base rate to 20%, slope2 reduced from 300% to 40%, and fixed price feeds replacing Chainlink feeds) across three Aave deployments (Ethereum v2, Polygon v2, Polygon v3). However, the only decoded on-chain action provided is a generic execute()/fallback() call to a single payload contract on Ethereum mainnet. This is the standard pattern for Aave governance payloads, where the top-level proposal simply invokes a pre-audited payload contract whose internal logic (verified via the linked GitHub implementation and test files) performs the granular parameter updates described in the prose. Because the calldata here is opaque beyond the dispatch call, I cannot independently verify the exact numeric values (LT, base rate, slope2, fixed price) or confirm that Polygon-side updates are triggered from this same action versus a separate cross-chain payload not included in this decoded set. This is a limitation of the available decoding rather than evidence of an actual mismatch — there is nothing in the visible calldata that contradicts the description. Given the lack of granularity, I set confidence to low rather than asserting a discrepancy, since flagging an issue here would be speculative rather than evidence-based. No value mismatches, target mismatches, or omissions can be confirmed or denied from the single opaque action provided.
Generated by Kvorum
04Actions
- Target
- 0x964c…16e9
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
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07Forum
No forum thread is confidently linked to this proposal.
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