[AIP] Onboard PAXG to Aave V4 Global Dollar Hub

Simple Summary

This proposal onboards Pax Gold (PAXG) to the Aave V4 Global Dollar Hub on Ethereum. It deploys and configures the PAXG Gold Spoke, where PAXG is collateral only and USDG is borrowable, and enables native USDG as a borrowable reserve on the Pendle Spoke with a 4,000,000 USDG Draw Cap.

Motivation

PAXG is an ERC-20 token issued by Paxos Trust Company. Each unit represents one fine troy ounce of a London Good Delivery gold bar held in professional vaults. Redemption and custody are administered by the regulated issuer, and holdings are subject to periodic third party attestations.

Onboarding PAXG to the Global Dollar Hub:

• Introduces an asset backed by gold to the Aave V4 Ethereum instance, broadening the range of collateral and liquidity beyond dollar denominated exposures.
• Gives users access to a regulated representation of physical gold within the Aave ecosystem, supporting demand from institutional participants and DeFi protocols seeking commodity exposure.
• Complements the Global Dollar Hub's existing composition by adding an asset with limited correlation for diversified liquidity strategies.

Specification

This proposal adds PAXG to the Aave V4 Global Dollar Hub on Ethereum, configures PAXG and USDG reserves on the PAXG Gold Spoke, and enables USDG on the Pendle Spoke.

PAXG: 0x45804880De22913dAFE09f4980848ECE6EcbAf78

The PAXG Gold Spoke is deployed at 0xAD75cE6354f87F3135cE10621d385d8D1e2562C2. The payload wires this deployment to the Ethereum AccessManager and configures it with the PAXG and USDG reserves below.

Spoke configuration

Hub	Spoke	Reserve	Collateral Factor	Max Liquidation Bonus	Borrowable	Collateral Risk	Liquidation Fee	riskPremiumThreshold	receiveShares
Global Dollar Hub	PAXG Gold Spoke	PAXG	75.00%	6.50%	FALSE	0	10.00%	0	TRUE
Global Dollar Hub	PAXG Gold Spoke	USDG	0.00%	-	TRUE	-	-	0	TRUE
Global Dollar Hub	Pendle Spoke	USDG	0.00%	-	TRUE	-	-	0	TRUE

riskPremiumThreshold is set to 0 for all reserves, in line with other assets across V4, as risk premiums are not currently in use. receiveShares is enabled for all reserves. For required onchain fields, the dash values in the table resolve to zero.

Dynamic liquidation configuration

Parameter	Value
targetHealthFactor	1.20
healthFactorForMaxBonus	0.90
liquidationBonusFactor	0.80

As a noncrypto open market spoke, the PAXG Gold Spoke uses more conservative liquidation restoration parameters. Draw Caps are set conservatively to reflect the PAXG Gold Spoke's developing liquidity for borrowing.

Caps

Hub	Spoke	Reserve	Add Cap	Draw Cap
Global Dollar Hub	PAXG Gold Spoke	PAXG	2500	0
Global Dollar Hub	PAXG Gold Spoke	USDG	5,000,000	9,500,000
Global Dollar Hub	Pendle Spoke	USDG	-	4,000,000

PAXG is also registered with the Tokenization Spoke with an Add Cap of 0.

Oracle configuration

PAXG is listed against the Chainlink XAU/USD price feed, pricing the token at underlying gold spot with no CAPO growth ceiling wrapper. PAXG carries no monotonic exchange rate growth for a cap to bound, so a CAPO adapter is not recommended. The accepted risks are a sustained dislocation in the token price, priced at full gold spot, and the feed's weekend staleness. The liquidation parameters set when collateral is enabled in a future phase must absorb that envelope rather than assume a continuously updating reference.

Disclaimer

This proposal was prepared by Aave Labs in its capacity as a contributor to the Aave ecosystem. Aave Labs has no financial relationship with Paxos Trust Company or any of its affiliates and has not received compensation from Paxos in connection with this proposal.

References

• Implementation: AaveV4Ethereum
• Tests: AaveV4Ethereum
• Discussion
• Snapshot

Copyright

Copyright and related rights waived via CC0.