KVORUM
aaveSource: Aave governance v3 · #73

Reserve Factor Updates

executedApr 13, 2024, 08:53 AM UTCby570x57ab…2922

01Summary

AISummary by Kvorumclaude-haiku-4-5

This proposal increases Reserve Factors (RF) for multiple assets on Aave V2 across Ethereum and Avalanche networks. On Ethereum V2, 11 assets will see RF increases of 5% each (e.g., DAI from 35% to 40%, WBTC from 40% to 45%). On Avalanche V2, 6 assets will see larger RF increases ranging from 25-30% (e.g., DAIe, USDCe, USDTe, WETHe from 10% to 35%). This reduces deposit yields and directs more interest revenue to Aave DAO's Treasury while encouraging migration from V2 to V3. User funds remain at liquidation risk and borrowing rates are unchanged.

Type
parameter change

Key changes

  • Ethereum V2: Increase Reserve Factor for DAI, USDC, USDT, WETH, LUSD from 35% to 40%(medium)
  • Ethereum V2: Increase Reserve Factor for FRAX, LINK, sUSD, WBTC from 40% to 45%(medium)
  • Ethereum V2: Increase Reserve Factor for GUSD, USDP from 30% to 35%(medium)
  • Avalanche V2: Increase Reserve Factor for DAIe, USDCe, USDTe, WETHe from 10% to 35%(high)
  • Avalanche V2: Increase Reserve Factor for WAVAX from 15% to 35%(high)
  • Avalanche V2: Increase Reserve Factor for WBTCe from 10% to 40%(high)

Notable concerns

  • Reduced deposit yields may negatively impact users on V2 platforms
  • Significant Reserve Factor increases on Avalanche V2 (25-30 percentage points) represent substantial changes compared to Ethereum V2 increases (5 percentage points)
ContractsAaveV2EthereumAaveV2Avalanche
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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02Description

370 words

Simple Summary

This AIP is composed of two actions: (1) a continuation of proposal 49 on Governance V3 that increases the Reserve Factor (RF) for assets on Ethereum V2 by 5.00%, up to a maximum of 99.99%; and (2) to start periodically increasing the RF across Avalanche V2.

Motivation

This AIP will reduce deposit yield for assets on Ethereum & Avalanche V2 by increasing the RF. With this upgrade being passed, users will be further encouraged to migrate from Ethereum V2 to V3.

Increasing the RF routes a larger portion of the interest paid by users to Aave DAO's Treasury. User's funds are not at risk of liquidation and the borrowing rate remains unchanged.

Of the assets with an RF set at 99.99%, there is no change. All other asset reserves will have the RF increased by up to 5.00%.

Specification

For Ethereum V2, the following parameters are to be updated as follows:

AssetPrevious Reserve FactorNew Reserve Factor
DAI35.00%40.00%
FRAX40.00%45.00%
GUSD30.00%35.00%
LINK40.00%45.00%
LUSD35.00%40.00%
sUSD40.00%45.00%
USDC35.00%40.00%
USDP30.00%35.00%
USDT35.00%40.00%
WBTC40.00%45.00%
WETH35.00%40.00%

For Avalanche V2, the following parameters are to be updated as follows:

AssetPrevious Reserve FactorNew Reserve Factor
DAIe10.00%35.00%
USDCe10.00%35.00%
USDTe10.00%35.00%
WAVAX15.00%35.00%
WBTCe10.00%40.00%
WETHe10.00%35.00%

References

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

AIMismatch analysis by Kvorum

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04Actions

1 total
#0fallback()chain 0x1
Target
0xce67…1114
Value
0 wei
Function
fallback()
Arguments
{}
Calldata

05Tally

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