BUSD Offboarding Plan Part III
01Summary
This is the third phase of BUSD offboarding on Aave V2 Ethereum. It increases borrowing costs for BUSD by raising base interest rate from 3% to 100%, increasing slope1 from 7% to 70%, and decreasing uOptimal from 2% to 1%. It also removes aBUSD from the collector contract to increase utilization and further incentivize remaining borrowers to repay or face liquidation.
- Type
- parameter change
Key changes
- Increase base interest rate from 3% to 100%(high)
- Increase slope1 parameter from 7% to 70%(high)
- Decrease uOptimal from 2% to 1%(high)
- Remove aBUSD from collector contract to increase BUSD utilization ratio(high)
Notable concerns
- Remaining vBUSD debt holders are identified as inactive or relatively unresponsive to previous rate increases, suggesting they may be unable or unwilling to repay
- The aggressive parameter changes aim to force liquidations or repayments, which could negatively impact affected borrowers
- Time-sensitive nature due to BUSD/Paxos situation and potential protocol bad debt risk
Generated by Kvorum
02Description
Simple Summary
This ARFC proposal outlines the third part of the offboarding plan for BUSD on the Aave V2 Ethereum market. The plan aims to further reduce the amount of liquidity in BUSD and encourage users to switch to other stablecoins. The plan involves modification of BUSD risk parameters and withdrawal of aBUSD from the collector contract.
Motivation
Please refer to the first and second parts of the BUSD offboarding plan for more context. The first two parts of the plan were successful, driving out liquidity and incentivizing active users to repay their debt and move their position to other stablecoins. The remaining vBUSD debt holders seem to be inactive or unaffected by high rates, due to the time-sensitive nature of BUSD/Paxos situation and the potential risk of protocol bad debt.
This third part of the offboarding plan will concentrate efforts on creating unsustainable positions for remaining borrowers to either motivate them enough to repay or reach liquidation thresholds.
Both actions are proposed to be performed:
- Modify risk parameters to “increase” Base interest rate and slope1 curve aggressiveness while decreasing the uOptimal parameter.
- Remove aBUSD from the collector contract to increase the utilization ratio of BUSD and increase the cost of open positions.
Specification
Ticker: BUSD (BUSD)
Contract Address: 0x4Fabb145d64652a948d72533023f6E7A623C7C53
The offboarding plan will be carried out With the current AIP with the following parameters:
- Decrease uOptimal from 2% to 1%.
- reserveFactor remains unchanged at 99.9%.
- base rate increase from 3 to 100%.
- slope 1 increase from 7 to 70%.
- slope 2 remains unchanged at 300%.
Withdrawal of aBUSD from the collector contract. The BUSD will be kept as such in the collector contract, and a separate AIP will organize the swap of BUSD into other assets at a later stage.
References
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The decoded on-chain data consists of a single generic execute() call to a payload contract address, which is the standard pattern used in Aave governance proposals (via the AaveGovernanceV2 executor). The actual logic — such as setting BUSD's uOptimal, base rate, and slope1 parameters, and withdrawing aBUSD from the collector — is implemented inside the bytecode of the target payload contract and is not visible in the decoded calldata itself. This means we cannot directly verify the specific numeric parameters (uOptimal 2%->1%, base rate 3%->100%, slope1 7%->70%) or the aBUSD withdrawal action against on-chain call arguments, since none are exposed. However, this is a well-known and expected pattern for Aave V2/V3 governance payloads referenced by proposal code links (AaveV2EthBUSDIR_20230602.sol), and there is nothing in the visible calldata that contradicts the description. Given the lack of granular argument-level visibility, confidence in a detailed match is low, but there is no evidence of a mismatch, extra action, or omitted action based on what is decodable. Therefore this proposal is treated as consistent with low confidence, since the description cannot be fully verified against the flat execute() call structure.
Generated by Kvorum
04Actions
- Target
- 0x40c3…7e3c
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
08Similar proposals
- aaveexecutedBUSD Offboarding Plan Part II95%
- aaveexecutedBUSD Offboarding Plan90%
- aaveexecutedTUSD and BUSD Aave V2 Rate Amendments73%
- aaveexecutedBAL Interest Rate Upgrade66%
- aaveexecutedUpgrade AMPL implementation65%
- aaveexpiredConsolidate Reserve Factors and Enable Borrowing DPI65%
- aaveexecutedConsolidate Reserve Factors and Enable Borrowing DPI65%
- aaveexecutedBAL Interest Rate Curve Upgrades64%
- aaveexecutedFix rate strategies issue on Aave v2 Polygon63%
- aaveexecutedAave v2 ETH Interest Rate Curve Update63%