Add LUSD to Aave Optimism V3 pool
01Summary
Proposal to add LUSD (Liquity USD stablecoin) as a borrowable but non-collateral asset on Aave's Optimism v3 market, with a supply cap of 3M LUSD and borrow cap of 1.21M LUSD.
- Type
- protocol addition
Key changes
- Enable LUSD as a borrowable asset on Optimism v3 with 1.21M borrow cap and 3M supply cap(high)
- LUSD configured as non-collateral asset (LTV=0, cannot be used as collateral)(high)
- Interest rate parameters: 0% base rate, 4% slope1, 87% slope2 with 80% optimal utilization(medium)
- 10% reserve factor and 10% liquidation protocol fee applied to LUSD(medium)
Notable concerns
- LUSD cannot be used as collateral, limiting its utility as a risk mitigation measure
- Risk parameters and caps were jointly proposed by Gauntlet and Chaos Labs but their specific reasoning is not detailed in this proposal
- Proposal disclaims any financial relationship between ACI and Liquity, though ACI initiated the proposal under its stablecoin diversity mandate
Generated by Kvorum
02Description
Simple Summary
This AIP proposal presents Aave with the opportunity to onboard LUSD to the Optimism v3 Liquidity Pool.
Motivation
Supporting stablecoin diversity is part of the Aave-Chan Initiative (ACI) delegate platform.
The ACI does not have any link nor is paid by Liquity or any entity to present this AIP.
The risk parameters provided introduce LUSD as a non-collateral asset.
Supply and borrow caps are suggested for this asset to limit risk exposure, the caps have been proposed by a join collaboration between Gauntlet & Chaos Labs.
Specification
Ticker: LUSD
Contract Address: 0xc40f949f8a4e094d1b49a23ea9241d289b7b2819
| Risk Parameter | Value |
|---|---|
| Isolation Mode | NO |
| Enable Borrow | YES |
| Enable Collateral | NO |
| Loan To Value | N/A |
| Liquidation Threshold | N/A |
| Liquidation Bonus | N/A |
| Reserve Factor | 10% |
| Liquidation Protocol Fee | 10% |
| Borrow Cap | 1,210k |
| Supply Cap | 3,000K |
| Debt Ceiling | N/A |
| Base | 0% |
| Slope1 | 4% |
| Uoptimal | 80% |
| Slope2 | 87% |
The proposal payload uses the IEngine to perform a new asset listing with the following parameters:
IEngine.Listing({
asset: LUSD,
assetSymbol: 'LUSD',
priceFeed: LUSD_USD_FEED,
rateStrategyParams: Rates.RateStrategyParams({
optimalUsageRatio: _bpsToRay(80_00),
baseVariableBorrowRate: 0,
variableRateSlope1: _bpsToRay(4_00),
variableRateSlope2: _bpsToRay(87_00),
stableRateSlope1: _bpsToRay(4_00),
stableRateSlope2: _bpsToRay(87_00),
baseStableRateOffset: _bpsToRay(1_00),
stableRateExcessOffset: _bpsToRay(8_00),
optimalStableToTotalDebtRatio: _bpsToRay(20_00)
}),
enabledToBorrow: EngineFlags.ENABLED,
stableRateModeEnabled: EngineFlags.DISABLED,
borrowableInIsolation: EngineFlags.DISABLED,
withSiloedBorrowing: EngineFlags.DISABLED,
flashloanable: EngineFlags.DISABLED,
ltv: 0,
liqThreshold: 0,
liqBonus: 0,
reserveFactor: 10_00,
supplyCap: 3_000_000,
borrowCap: 1_210_000,
debtCeiling: 0,
liqProtocolFee: 0,
eModeCategory: 0
});
References
A list of relevant links like for this proposal e.g.
Security Considerations
The proposal Payload was reviewed by Bored Ghost Developing.
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal description gives a highly specific set of risk parameters and a full IEngine.Listing() Solidity snippet for onboarding LUSD to Aave v3 Optimism. However, the only decoded on-chain action available is a single top-level call: execute(address) invoking a payload address (0xF585F8cf...). This matches the standard Aave governance pattern where the DAO's cross-chain governance executor calls execute() on a payload contract that itself performs the detailed listing logic (asset caps, rates, etc.) via delegatecall. The actual parameter-level calldata (asset address, caps, rate strategy) is not visible in the decoded action provided — it lives inside the bytecode/logic of the referenced payload contract, which is out of scope for this decoded action list. Because of this, I cannot directly verify or refute the specific numeric claims (10% reserve factor, 1,210k borrow cap, etc.) against on-chain calldata; the top-level action is opaque by design. This is a known limitation of the governance action format for Aave v3 cross-chain listings, not evidence of tampering. Given the absence of any visible mismatch and the standard nature of the execute(address) pattern, I found no concrete evidence of a discrepancy. However, because the decoded action does not expose the granular parameters needed for full verification, confidence in this assessment is low rather than high — this reflects the calldata's opacity, not a detected problem. No omissions, target mismatches, or misleading phrasing could be identified from the available data.
Generated by Kvorum
04Actions
- Target
- 0x5f5c…6711
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0xF585F8cf39C1ef5353326e0352B9E237f9A52587" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- [ARFC] Add LUSD to Optimism V3 Market ↗discourse · high confidence
Arguments for
- LUSD is a growing stablecoin within the Optimism ecosystem with existing liquidity and fits Aave-Chan Initiative's platform of supporting stablecoin diversity.— MarcZeller, TokenBrice
- The proposed parameters for LUSD replicate those successfully adopted on the Ethereum V3 market, providing a tested baseline for Optimism.— MarcZeller
- Listing LUSD as a non-collateral asset reduces protocol risk while still enabling borrowing functionality and stablecoin options for users.— ChaosLabs
Arguments against
None surfaced.
Notable participants
- MarcZellerProposer and founder of Aave-Chan Initiative, authored the ARFC and escalated to Snapshot.
- TokenBriceLiquity ecosystem representative available to answer community questions about LUSD on Optimism.
- ChaosLabsRisk service provider who reviewed and supported the proposal with the proposed supply and borrow caps.
Generated by Kvorum
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