Chaos Labs RF and IR Updates - Aave V2 Ethereum
01Summary
Proposal to accelerate Aave V2 Ethereum deprecation by increasing reserve factors to 99.90% for 20 frozen assets and implementing a standardized interest rate curve (20% base rate, 0% slope1, 300% slope2) to discourage deposits and encourage borrowing repayment.
- Type
- parameter change
Key changes
- Increase reserve factors from current levels (10-50%) to 99.90% for 20 frozen assets including CRV, SNX, MKR, DPI, ZRX, CVX, 1INCH, MANA, ENJ, RAI, UNI, AMPL, BAT, BAL, YFI, KNCL, ENS, UST, REN, xSUSHI to eliminate yield for depositors(high)
- Standardize base rate to 20% across all 20 frozen assets (previously ranging from 0-5%)(high)
- Set slope1 to 0% for all 20 frozen assets (previously ranging from 2-22%) to create constant borrow rate until UOptimal(high)
- Standardize slope2 to 300% for most assets, with some adjustments (previously ranging from 75-750%) to incentivize repayment at higher utilization(high)
Notable concerns
- Extreme interest rate changes could cause borrower defaults
- High base rate of 20% may rapidly increase borrowing costs for remaining V2 users
- Implementation is part of ongoing deprecation strategy with multiple prior proposals already implemented
Generated by Kvorum
02Description
Simple Summary
A proposal to update Reserve Factors and IR curves for frozen assets on V2 Ethereum as part of the ongoing deprecation plan.
Motivation
In the past several months, the community is in the process of gradually winding down the V2 markets via a series of LT reductions and incremental increases in RFs. These efforts have been ongoing with the following proposals already implemented:
- [ARFC] Chaos Labs - Incremental Reserve Factor Updates - Aave V2 Ethereum
- [ARFC] Freeze CRV on V2
- [ARFC] Chaos Labs Risk Parameter Updates - Aave V2 Ethereum - 2023.6.23
- [ARFC] TUSD Offboarding Plan
- [ARFC] Set CRV LTV to Zero on V2
- [ARFC] Chaos Labs Risk Parameter Updates - Aave V2 Ethereum - 2023.08.09
- [ARFC] CRV Aave V2 Ethereum - LT Reduction - 08.21.2023
- [ARFC] TUSD Offboarding Plan Part II
- [ARFC] CRV Aave V2 Ethereum - LT Reduction - 09.19.2023
- [ARFC] V2 Ethereum Deprecation 10.03.2023
- [ARFC] V2 Ethereum LT Reductions - 10.27.2023
- [ARFC] V2 Ethereum Deprecation 11.20.2023
Below are the current supply and borrow amounts and utilization for V2 Ethereum frozen assets, excluding assets that have already had IR curves amended in previous proposals and LINK, which will be accommodated separately:
| Asset | Total Supply ($) | Total Borrows ($) | Utilization Rate | Borrow APY | Base | Uoptimal | Slope1 | Slope2 |
|---|---|---|---|---|---|---|---|---|
| CRV | $10,580,000 | $2,310,000 | 21.83% | 10.44% | 3% | 45% | 17% | 300% |
| SNX | $3,570,000 | $2,080,000 | 58.26% | 12.44% | 3% | 80% | 15% | 100% |
| MKR | $4,830,000 | $341,800 | 7.08% | 1.11% | 0% | 45% | 7% | 300% |
| DPI | $322,890 | $264,000 | 81.76% | 586% | 0% | 50% | 7% | 300% |
| ZRX | $1,840,000 | $210,290 | 11.43% | 0.18% | 0% | 45% | 7% | 300% |
| CVX | $510,630 | $199,390 | 39.05% | 6.24% | 0% | 45% | 7% | 300% |
| 1INCH | $107,930 | $107,930 | 100.00% | 2054% | 0% | 45% | 7% | 300% |
| MANA | $860,890 | $68,980 | 8.01% | 1.25% | 0% | 45% | 7% | 300% |
| ENJ | $421,880 | $53,730 | 12.74% | 2% | 0% | 45% | 7% | 300% |
| RAI | $257,980 | $49,400 | 19.15% | 0.96% | 0% | 80% | 4% | 75% |
| UNI | $5,650,000 | $47,010 | 0.83% | 0.13% | 0% | 45% | 7% | 300% |
| AMPL | $40,750 | $39,800 | 97.67% | 186.21K% | 1% | 80% | 3% | 750% |
| BAT | $168,860 | $36,360 | 21.53% | 3.41% | 0% | 45% | 7% | 300% |
| BAL | $465,520 | $35,720 | 7.67% | 7.37% | 5% | 80% | 27% | 150% |
| YFI | $1,160,000 | $27,900 | 2.41% | 0.37% | 0% | 45% | 7% | 300% |
| KNCL | $32,320 | $20,330 | 62.90% | 8.03% | 0% | 65% | 8% | 300% |
| ENS | $9,200,000 | $18,200 | 0.20% | 0.03% | 0% | 45% | 7% | 300% |
| UST | $85,430 | $10,150 | 11.88% | 0.60% | 0% | 45% | 7% | 300% |
| REN | $174,060 | $6,900 | 3.96% | 0.62% | 0% | 45% | 7% | 300% |
| xSUSHI | $888,870 | $727 | 0.08% | 0.01% | 0% | 45% | 7% | 300% |
As part of our ongoing deprecation process, we propose the following measures designed to motivate the repayment of borrowed assets and the redemption of supplied assets:
Increase Reserve Factors:
In order to further disincentivize the supply of the assets being deprecated, this proposal recommends setting the RFs of all frozen assets on V2 Ethereum to near 100%. This change will effectively remove any yield for depositors of these assets, thereby discouraging their supply.
Increase Borrow Rates:
To encourage the repayment of borrowed assets, we propose raising the borrow rates across V2 frozen assets. This will be achieved by creating a constant borrow rate up to the currently set UOptomal configuration, with the moderate option as voted by the community on Snapshot:
Moderate (Chaos Recommendation):
- Set Base Rate at 20%
- Set Slope1 at 0%
- Set Slope2 at 300%
After these changes are put into effect, we'll evaluate their influence on loan repayments and, if necessary, offer additional recommendations. Future updates could involve further hikes in borrow rates and adjustments to the UOptimal points.
Specification
| Asset | Current RF | Rec RF | Current Base | Recommended Base | Current Slope1 | Recommended Slope1 | Current Slope2 | Recommended Slope2 |
|---|---|---|---|---|---|---|---|---|
| 1INCH | 30% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| BAL | 35% | 99.90% | 5% | 20% | 22% | 0% | 150% | 300% |
| BAT | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| CRV | 30% | 99.90% | 3% | 20% | 14% | 0% | 300% | 300% |
| CVX | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| DPI | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| ENJ | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| ENS | 30% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| MANA | 50% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| MKR | 30% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| REN | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| SNX | 45% | 99.90% | 3% | 20% | 12% | 0% | 100% | 300% |
| UNI | 30% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| xSUSHI | 50% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| YFI | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| ZRX | 35% | 99.90% | 0% | 20% | 7% | 0% | 300% | 300% |
| KNCL | 30% | 99.90% | 0% | 20% | 8% | 0% | 300% | 300% |
| UST | 20% | 99.90% | 0% | 20% | 4% | 0% | 300% | 300% |
| AMPL | 10% | 99.90% | 1% | 20% | 2% | 0% | 750% | 300% |
| RAI | 20% | 99.90% | 0% | 20% | 4% | 0% | 75% | 300% |
References
- Implementation: AaveV2Ethereum
- Tests: AaveV2Ethereum
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal describes granular Reserve Factor and Interest Rate curve updates for ~20 frozen V2 Ethereum assets, with a detailed specification table of current vs. recommended values. However, the only decoded on-chain action is a single call to forwardPayloadForExecution, which is Aave's standard cross-chain governance pattern: the AIP itself does not contain the granular parameter changes, but instead forwards execution to a separate payload contract (identified by payloadId and a payload controller address) that was presumably deployed with the logic matching the 'Implementation' link cited in the References section. Because the actual RF/IR-setting logic lives inside that external payload contract and is not present in the decoded calldata provided here, it is not possible to directly verify that the numeric changes in the description (e.g., RF to 99.90%, Base 20%, Slope1 0%, Slope2 300%) match what the payload will execute. This is a normal and expected structure for Aave V2 Ethereum proposals of this type, so no discrepancy is flagged, but confidence is marked low since the granular calldata that would allow a line-by-line check is not available in this decoded action set — only the forwarding call is visible.filepath
Generated by Kvorum
04Actions
- Target
- 0x9aee…2bc7
- Value
- 0 wei
- Function
- forwardPayloadForExecution((uint256,uint8,address,uint40))
- Arguments
{ "0": [ "1", "1", "0xdAbad81aF85554E9ae636395611C58F7eC1aAEc5", "30" ] }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
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