Onboard USDe to Aave V3 X Layer

Simple Summary

This ARFC proposes to onboard USDe as a supported asset on the Aave V3 X Layer Instance.

Motivation

USDe is Ethena's synthetic dollar, designed to maintain a value referenced to the US dollar through a combination of protocol held backing assets and offsetting derivatives positions.

USDe has developed significant adoption across DeFi and is currently supported across several Aave markets as both a supplied and borrowed asset.

USDe is deployed on X Layer using Ethena's LayerZero OFT infrastructure, enabling USDe to move across supported networks through Ethena's canonical cross-chain deployment.

Onboarding USDe to Aave V3 X Layer would:

• Expand the range of stablecoin assets available to Aave users on X Layer.
• Provide an additional asset for lending and borrowing alongside USDT0, USDG, USDC and GHO.
• Enable USDe to be used as collateral within a dedicated USDe Stablecoin E-Mode.
• Increase the available stablecoin borrowing liquidity for the existing xBTC, xETH, xSOL, and WOKB E-Mode categories.
• Expand the range of cross-margin and stablecoin strategies available to users on X Layer.

Per LlamaRisk's recommendation, USDe is not enabled as collateral in the general market. Users can use it as collateral within the new USDe Stablecoin E-Mode.

Specification

USDe Contract Address

Asset	Address
USDe	0x5d3a1Ff2b6BAb83b63cd9AD0787074081a52ef34

The address above represents Ethena's USDe deployment on X Layer.

Proposed Market Configuration

We propose initially configuring USDe with the following parameters, subject to final recommendations from Aave Risk Service Providers.

Parameter	Value
Asset	USDe
Isolation Mode	No
Borrowable	Yes
Collateral Enabled	No
Supply Cap	100,000,000
Borrow Cap	20,000,000
Debt Ceiling	-
LTV	0.00%
LT	0.00%
Liquidation Bonus	0.0%
Liquidation Protocol Fee	10%
Variable Base	6.30%
Variable Slope 1	0.25%
Variable Slope 2	45.00%
Uoptimal	85.00%
Reserve Factor	25%
Flashloanable	Yes
Siloed Borrowing	No
Borrowable in Isolation	No
eModes	1, 2, 3, 4, 9

The proposed collateral parameters do not allow USDe to be enabled as collateral outside E-Mode.

Final onboarding parameters remain subject to review and recommendations from Aave's Risk Service Providers.

E-Mode Configuration

We propose adding USDe as a borrowable asset to the four existing stablecoin borrowing E-Mode categories on X Layer.

eMode #1

Parameter	Value	Value	Value	Value	Value	Value
Asset	xBTC	USDT0	USDe	USDG	USDC	GHO
Collateral	Yes	No	No	No	No	No
Borrowable	No	Yes	Yes	Yes	Yes	Yes
Max LTV	78.00%	-	-	-	-	-
Liquidation Threshold	81.00%	-	-	-	-	-
Liquidation Bonus	6.00%	-	-	-	-	-

eMode #2

Parameter	Value	Value	Value	Value	Value	Value
Asset	xETH	USDT0	USDe	USDG	USDC	GHO
Collateral	Yes	No	No	No	No	No
Borrowable	No	Yes	Yes	Yes	Yes	Yes
Max LTV	78.00%	-	-	-	-	-
Liquidation Threshold	80.00%	-	-	-	-	-
Liquidation Bonus	6.00%	-	-	-	-	-

eMode #3

Parameter	Value	Value	Value	Value	Value	Value
Asset	xSOL	USDT0	USDe	USDG	USDC	GHO
Collateral	Yes	No	No	No	No	No
Borrowable	No	Yes	Yes	Yes	Yes	Yes
Max LTV	65.00%	-	-	-	-	-
Liquidation Threshold	70.00%	-	-	-	-	-
Liquidation Bonus	7.50%	-	-	-	-	-

eMode #4

Parameter	Value	Value	Value	Value	Value	Value
Asset	wOKB	USDT0	USDe	USDG	USDC	GHO
Collateral	Yes	No	No	No	No	No
Borrowable	No	Yes	Yes	Yes	Yes	Yes
Max LTV	50.00%	-	-	-	-	-
Liquidation Threshold	55.00%	-	-	-	-	-
Liquidation Bonus	10.00%	-	-	-	-	-

eMode #9

Parameter	Value	Value	Value	Value	Value
Asset	USDe	USDT0	USDG	USDC	GHO
Collateral	Yes	No	No	No	No
Borrowable	No	Yes	Yes	Yes	Yes
Max LTV	91.00%	-	-	-	-
Liquidation Threshold	93.00%	-	-	-	-
Liquidation Bonus	2.00%	-	-	-	-

These are the four existing X Layer E-Mode configurations. USDT0, USDG, USDC and GHO are currently configured as borrowable stablecoins within each category. This proposal would extend the same functionality to USDe.

Oracle

A Chainlink USDT/USD Price Feed is available on X Layer Mainnet.

Consistent with the oracle architecture used for USDe across Aave markets, we propose pricing USDe using the Chainlink USDT/USD reference feed together with a Stable Price Cap Adapter.

ParameterValue
Reference Feed	USDT / USD
Network	X Layer Mainnet
Chainlink Product	USDT/USD-RefPrice-DF-XLayer-001
Pricing	USDT/USD + Stable Price Cap Adapter
Upper Price Deviation	4%

The Stable Price Cap Adapter would cap upward price deviation at 4%, consistent with the configuration used for USDe and other stablecoin assets across Aave markets.

The final oracle contract, adapter deployment, and configuration remain subject to confirmation by the relevant Aave Risk and Technical Service Providers.

Next Steps

1. Gather feedback from the community.
2. Using the Direct-to-AIP process, incorporate feedback from the Risk Service Provider.
3. Escalate this proposal to the AIP Voting stage.

References

• Implementation: AaveV3XLayer
• Tests: AaveV3XLayer
• Discussion

Copyright

Copyright and related rights waived via CC0.