Aave V3 Interest Rate Curve Changes (4/27)
01Summary
Gauntlet proposes to adjust interest rate curve parameters across Aave V3 on Ethereum, Polygon, Avalanche, Arbitrum, and Optimism. Changes target assets like USDC, WBTC, CRV, USDT, DPI, and EURS by modifying variable slope rates, optimal utilization ratios, and reserve factors to manage risk and optimize protocol revenue based on current market conditions.
- Type
- parameter change
Key changes
- Reduce USDT optimal utilization on Ethereum from 0.9 to 0.8(medium)
- Reduce USDC Variable Slope 1 on Ethereum from 0.04 to 0.035(medium)
- Reduce WBTC Variable Slope 1 across Ethereum, Polygon, Avalanche, Arbitrum, and Optimism from 0.07 to 0.04(high)
- Increase USDT Variable Slope 2 on Ethereum from 0.72 to 0.75(medium)
- Increase CRV Reserve Factor on Ethereum and Polygon from 0.2 to 0.35(medium)
- Adjust DPI Variable Slope 1 on Polygon from 0.07 to 0.1(medium)
- Increase EURS Variable Slope 1 on Polygon from 0.04 to 0.06 and on Arbitrum from 0.04 to 0.06(medium)
Notable concerns
- Changes implemented via pre-deployed payloads across multiple chains simultaneously
- Gauntlet's methodology and specific market analysis underlying parameter recommendations not detailed in proposal
- Terms of service at gauntlet.network/tos apply to services provided by Gauntlet
Generated by Kvorum
02Description
Summary
A proposal to make parameter changes on the Ethereum, Polygon, Avalanche, Arbitrum, and Optimism Aave V3 markets. For more details, see the full forum post here.
Motivation
Given the significant shifts in crypto markets, Gauntlet’s platform has evaluated all assets on Aave V3’s active markets and has identified opportunities to adjust parameters for certain assets for the benefit of the protocol. Our methodology makes data-informed decisions around setting borrower and supplier interest rates when market conditions require the protocol to reduce risk or when strategic opportunities present themselves to increase protocol revenue without materially impacting risk. This analysis further finetunes the interest rate curves of Aave V3 across the Ethereum, Polygon, Avalanche, Arbitrum, and Optimism markets.
Specification
Aave V3 Ethereum
| CRV | USDC | USDT | WBTC | |
|---|---|---|---|---|
| Optimal | 0.7 | 0.9 | 0.9 → 0.8 | 0.45 |
| Variable Base | 0.03 | 0.0 | 0.0 | 0.0 |
| Variable Slope 1 | 0.14 | 0.04 → 0.035 | 0.04 | 0.07 → 0.04 |
| Variable Slope 2 | 3.0 | 0.6 | 0.72 → 0.75 | 3.0 |
| Stable Base Offset | 0.03 | 0.01 | 0.01 | 0.02 |
| Stable Slope 1 | 0.08 | 0.005 | 0.04 | 0.07 |
| Stable Slope 2 | 3.0 | 0.6 | 0.72 | 3.0 |
| Reserve Factor | 0.2 → 0.35 | 0.1 | 0.1 | 0.2 |
Aave V3 Polygon
| CRV | DPI | EURS | USDC | WBTC | |
|---|---|---|---|---|---|
| Optimal | 0.7 | 0.45 | 0.8 | 0.9 | 0.45 |
| Variable Base | 0.03 | 0.0 | 0.0 | 0.0 | 0.0 |
| Variable Slope 1 | 0.14 | 0.07 → 0.1 | 0.04 → 0.06 | 0.04 → 0.035 | 0.07 → 0.04 |
| Variable Slope 2 | 3.0 | 3.0 | 0.75 | 0.6 | 3.0 |
| Stable Base Offset | 0.03 | 0.02 | 0.01 | 0.01 | 0.02 |
| Stable Slope 1 | 0.08 | 0.0 | 0.005 | 0.005 | 0.0 |
| Stable Slope 2 | 3.0 | 0.0 | 0.75 | 0.6 | 0.0 |
| Reserve Factor | 0.2 → 0.35 | 0.35 | 0.1 | 0.1 | 0.2 |
Aave V3 Avalanche
| USDC | WBTC | |
|---|---|---|
| Optimal | 0.9 | 0.45 |
| Variable Base | 0.0 | 0.0 |
| Variable Slope 1 | 0.04 → 0.035 | 0.07 → 0.04 |
| Variable Slope 2 | 0.6 | 3.0 |
| Stable Base Offset | 0.01 | 0.02 |
| Stable Slope 1 | 0.005 | 0.0 |
| Stable Slope 2 | 0.6 | 0.0 |
| Reserve Factor | 0.1 | 0.2 |
Aave V3 Arbitrum
| EURS | USDC | WBTC | |
|---|---|---|---|
| Optimal | 0.8 | 0.9 | 0.45 |
| Variable Base | 0.0 | 0.0 | 0.0 |
| Variable Slope 1 | 0.04 → 0.06 | 0.04 → 0.035 | 0.07 → 0.04 |
| Variable Slope 2 | 0.75 | 0.6 | 3.0 |
| Stable Base Offset | 0.01 | 0.01 | 0.02 |
| Stable Slope 1 | 0.005 | 0.005 | 0.0 |
| Stable Slope 2 | 0.75 | 0.6 | 0.0 |
| Reserve Factor | 0.1 | 0.1 | 0.2 |
Aave V3 Optimism
| USDC | WBTC | |
|---|---|---|
| Optimal | 0.9 | 0.45 |
| Variable Base | 0.0 | 0.0 |
| Variable Slope 1 | 0.04 → 0.035 | 0.07 → 0.04 |
| Variable Slope 2 | 0.6 | 3.0 |
| Stable Base Offset | 0.01 | 0.02 |
| Stable Slope 1 | 0.005 | 0.0 |
| Stable Slope 2 | 0.6 | 0.0 |
| Reserve Factor | 0.1 | 0.2 |
Implementation
The proposal implements changes on Aave V3 Ethereum, Polygon, Arbitrum, and Optimism using the following pre-deployed payloads:
- Ethereum:
0xfc7b55cc7c5bd3ae89ac679c7250ab30754c5cc5 - Arbitrum:
0xf4d1352b3e9e99fca6aa20f62fe95192a26c9527 - Optimism: [
0xac63290bc16fbc33353b14f139cef1c660ba56f0](https://optimistic.etherscan.io/address/0xac63290bc16fbc33353b14f139cef1c660ba56f0 - Polygon:
0x1cdb984008dcee9d06c28654ed31cf82680eea62
Changes on Avalanche can be implemented using the pre-deployed steward located at 0x24bdacf6bbebaf567123da16cdb79a266597e92b
Copyright
Copyright and related rights waived via CC0.
By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos. This message is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services by Gauntlet Networks Inc. No reference to any specific security constitutes a recommendation to buy, sell or hold that security or any other security. Nothing in this report shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this report constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed in this report should not be taken as advice to buy, sell or hold any security. The information in this report should not be relied upon for the purpose of investing. In preparing the information contained in this report, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors. Any views expressed in this report by us were prepared based upon the information available to us at the time such views were written. Changed or additional information could cause such views to change. All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.
03Mismatch analysis
A calldata-vs-description analysis is not generated yet. Review the decoded actions →
04Actions
- Target
- 0xd1b3…cfa3
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0xF4d1352b3E9E99FCa6Aa20F62Fe95192A26C9527" }- Calldata
- Target
- 0xfc7b…5cc5
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
- Target
- 0x158a…d45b
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0x1Cdb984008dcEe9d06c28654ed31cf82680EeA62" }- Calldata
- Target
- 0x5f5c…6711
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0xaC63290BC16fBc33353b14f139cEf1c660ba56F0" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- [ARFC] Aave V3 Interest Rate Curve Recommendations from Gauntlet (2023-04-27) ↗discourse · high confidence
Arguments for
- Lower USDC slope 1 to increase borrowing without material risk, as USDC utilization has remained safely below optimal even through severe market events.— wfu
- Standardizing USDT Ethereum curve to match other markets reduces risk by decreasing time at high utilization levels.— wfu
- Raising EURS slope 1 captures inelastic borrower demand at the cap while allowing elastic suppliers to increase supply, raising protocol revenue.— wfu
- Lowering WBTC slope 1 encourages borrowing of a stable large-cap asset, projected to increase annual revenue by $59k (74.9%).— wfu
- Increasing DPI slope 1 charges inelastic users at the optimal utilization level to increase protocol revenue by $430 (49.4%) annually.— wfu
- Raising CRV reserve factor on Polygon where the supply cap is maxed out generates $16.4k (75.2%) additional annual revenue.— wfu
- Overall proposal is projected to generate over $135k in annualized protocol revenue growth across multiple assets and chains.— wfu
Arguments against
None surfaced.
Notable participants
- wfuGauntlet proposer; authored the detailed proposal with methodology, modeling, and recommendations for interest rate curve changes.
- PauljleiAave governance coordinator; announced timeline for Snapshot vote and AIP publication.
- GauntletGauntlet organization account; provided procedural updates on vote passage and AIP implementation.
- User1Community member; expressed time constraints but acknowledged the proposal's quality without raising substantive objections.
Generated by Kvorum
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