KNC onboarding on AaveV3 Ethereum market
01Summary
Proposal to add KNC token (Kyberswap's governance token) to AaveV3 Ethereum market in isolation mode, enabling KNC holders to borrow stablecoins against their KNC collateral with conservative risk parameters including a $1M debt ceiling, 35% LTV, and 1.2M KNC supply cap.
- Type
- protocol addition
Key changes
- Add KNC token as borrowable collateral in isolation mode on AaveV3 Ethereum(high)
- Set supply cap at 1.2M KNC and borrow cap at 650K KNC with $1M debt ceiling(high)
- Configure LTV at 35% and LT at 40% with 10% liquidation bonus(high)
- Enable flash loans for KNC and disable stable borrowing(medium)
Notable concerns
- Isolation mode limits KNC's use as collateral for borrowing other assets
- High variable slope2 of 300% indicates steep borrowing costs at high utilization
- KNC price volatility and market liquidity should be monitored given the new Aave market demand
Generated by Kvorum
02Description
Simple Summary
This AIP is proposing to add the KNC token from Kyberswap to the AaveV3 Ethereum market in isolation mode.
Motivation
KyberSwap is a multi-chain DEX aggregator + concentrated liquidity platform, that aims to offer superior rates for traders and capital-efficient returns for liquidity providers.
As one of the oldest and most popular DEX aggregators with an average of 500K web visitors per month. KyberSwap has already been deployed on 14 chains, including Ethereum, Polygon, Arbitrum, Optimism, Avalanche, and Base. Total trading volume has crossed $21B+ and the current total value locked (TVL) on all chains is $60M+.
KNC is Kyber’s utility and governance token and an important part of KyberSwap operations. KNC holders can stake KNC to vote on proposals to improve KyberSwap. In return, KNC voters receive rewards from fees collected through trading on KyberSwap and other ecosystem collaborations. As more trades are executed and new protocols are added, more rewards are generated.
Adding support for KNC on Ethereum V3 in isolated mode would allow KNC holders to borrow stablecoins by leveraging their KNC position, attracting new KNC deposits, which would add a new revenue stream for Aave while limiting the exposure.
Specification
We propose the following parameters according to Gauntlet and ChaosLabs's recommendations:
| Parameter | Value |
|---|---|
| Isolation Mode | Yes |
| Borrowable | Yes |
| Collateral Enabled | Yes |
| Supply Cap (KNC) | 1.200.000 |
| Borrow Cap (KNC) | 650,000 |
| Debt Ceiling | 1M$ |
| LTV | 35.00% |
| LT | 40.00% |
| Liquidation Bonus | 10.00% |
| Liquidation protocol Fee | 10.00% |
| Variable Base | 0.00% |
| Variable Slope1 | 9.00% |
| Variable Slope2 | 300.00% |
| Uoptimal | 45.00% |
| Reserve Factor | 20.00% |
| Stable Borrowing | Disabled |
| Stable Slope1 | 13.00% |
| Stable Slope2 | 300.00% |
| Base Stable Rate Offset | 3.00% |
| Stable Rate Excess Offset | 5.00% |
| Optimal Stable To Total Debt Ratio | 20.00% |
| Flahloanable | Yes |
| Siloed Borrowing | No |
| Borrowed in Isolation | No |
- Ticker: KNC
- Contract Address: 0xdeFA4e8a7bcBA345F687a2f1456F5Edd9CE97202
- Chainlink Oracle: 0xf8ff43e991a81e6ec886a3d281a2c6cc19ae70fc
References
- Implementation: Ethereum
- Tests: Ethereum
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal follows the standard Aave governance execution pattern: a single execute() call to a payload contract whose source code is linked in the 'Implementation' reference. The decoded calldata only shows this outer execute() call with no arguments, so the specific numeric parameters claimed in the description (LTV, LT, caps, rate curve, etc.) cannot be independently verified from the provided decoded action alone — they are embedded in the payload contract's bytecode/logic, not exposed as calldata arguments here. This is normal and expected for Aave AIPs of this type, and does not by itself indicate a discrepancy. Given the lack of granular decoded parameters to compare against the detailed specification table, confidence in a full line-by-line match is low, but there is no evidence of a mismatch, redirected funds, or unexpected target — the single action target is consistent with an Aave governance payload executor. No omissions, extra claims, or value mismatches can be identified from the available data, so the assessment is 'consistent' with low confidence due to limited visibility into the payload's internal calls.
Generated by Kvorum
04Actions
- Target
- 0x29ba…23ac
- 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.
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