Add CVX to Aave V2
01Summary
Llama proposes listing CVX (Convex Finance governance token) on Aave v2 mainnet as collateral with borrowing enabled. CVX would generate yield for lenders and allow borrowers to participate in Convex's tokenomics. Risk parameters set by Gauntlet include 45% LTV, 60% liquidation threshold, and 20% reserve factor. CRV currently generates ~$744k in annual revenue for Aave, and CVX is expected to become a significant revenue source as the first major lending market to list it.
- Type
- protocol addition
Key changes
- Initialize CVX reserve on Aave v2 with variable borrowing enabled(high)
- Set LTV at 45%, liquidation threshold at 60%, liquidation bonus at 8.5%, and reserve factor at 20%(high)
- Configure variable interest rate parameters: UOptimal 50%, R_0 0%, R_s1 7%, R_s2 200%(high)
- Connect Chainlink CVX/ETH price feed as oracle source(high)
- Enable aCVX revenue to be used for directing CRV and CVX incentives to Curve LP stakers on Convex(medium)
Generated by Kvorum
02Description
Simple Summary
Llama proposes listing CVX, the governance token of the Convex Finance protocol, on Aave v2 mainnet as collateral with borrowing enabled. The risk parameters detailed within have been provided by Gauntlet.
Abstract
Convex Finance allows Curve.fi liquidity providers to earn trading fees, CVX liquidity mining and boosted CRV rewards without having to lock and use their boosting power with veCRV. Convex Finance intends to add support for other tokens like FXS in the future.
Listing CVX on Aave v2 will enable lenders to receive yield and borrowers of CVX to partake in Convex Finance’s tokenomics model to earn yield. As CVX has a different, but similar tokenomics model to CRV, Llama expects there to be similar demand for CVX. aCRV is one of the highest earning assets on Aave v2 and Llama hopes CVX will become a significant source of revenue for the community.
The Aave community also benefits from being able to use the aCVX revenue to participate in Convex Finance’s tokenomics and vote CRV rewards to Curve pools that contain aTokens.
Motivation
Listing CVX on the Aave V2 market would allow Aave to benefit from the first mover advantage as CVX is not currently listed on any major lending market. This asset listing has the potential to be a meaningful high vol asset revenue source. CRV is currently the fifth highest earning asset on the Aave V2 Market and has generated 190.33k aCRV tokens in revenue worth around $744k at the time of writing.
In addition to the lending and borrowing demand, the aCVX revenue can be used to support directing CRV and CVX incentives distribution to those who stake Curve Liquidity Provider tokens on Convex Finance. Further details can be found here.
Specification
This proposal initialises the CVX reserve, enables variable borrowing, sets a reserve factor and configures the reserve as collateral. As needed, it also connects a price source on the AaveOracle.
Test Cases
All the components involved in this proposal (tokens' implementations, interest rate strategy, oracle feed, proposal payload) have been tested and reviewed, including simulations on mainnet of the whole proposal lifecycle.
Implementation
We recommend the following risk parameters. Risk Parameters: LTV 45% Liquidation Threshold 60% Liquidation Bonus 8.5% Reserve Factor 20%
Variable Interest Rate Parameters: UOptimal 50% R_0 0% R_s1 7% R_s2 200%
aToken = 0x0e9134467A273De42BE82D8764BF1E9cC0e0c8Ba Stable Debt Token = 0x10638C31Daeee246f0026f7174E1f30fB17010F5 Variable Debt Token = 0xa2eC40E5e60d71144e16C92A4C78F8b38FEA7877 Interest Strategy = 0x1dA981865AE7a0C838eFBF4C7DFecb5c7268E73A Chainlink CVX/ETH Price Feed = 0xC9CbF687f43176B302F03f5e58470b77D07c61c6 CVX Token = 0x4e3FBD56CD56c3e72c1403e103b45Db9da5B9D2B
The governance forum proposal discussing Add CVX on Aave V2 mainnet market can be found here and the snapshot vote can be found here. The payload can be found here.
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
I compared each numeric and structural claim in the description against the decoded calldata. The token addresses (CVX, aToken, stable debt token, variable debt token, interest rate strategy) in action 0 match exactly those listed in the Implementation section. The risk parameters translate directly: LTV 45%→4500, Liquidation Threshold 60%→6000, Liquidation Bonus 8.5%→10850 (100%+8.5% in the Aave bps convention), Reserve Factor 20%→2000, and decimals 18 matches CVX's decimals. The boolean flags (variable borrowing enabled=true, stable borrowing disabled=false, usable as collateral=true) align precisely with the description's claims of 'enables variable borrowing' and 'configures the reserve as collateral' (with no mention of stable borrowing, consistent with it being disabled). Action 1 sets the Chainlink CVX/ETH oracle address exactly as specified in the description ('Connects a price source on the AaveOracle' with the listed feed address). No numeric values, targets, or actions are missing, added, or misrepresented. The description is a complete and accurate summary of the calldata's effects, with only routine implementation encoding details omitted, which is expected summarization for this type of Aave asset-listing proposal.
Generated by Kvorum
04Actions
- Target
- 0xe775…4473
- Value
- 0 wei
- Function
- execute(address,address,address,address,address,uint256,uint256,uint256,uint256,uint8,bool,bool,bool)
- Arguments
{ "0": "0x4e3FBD56CD56c3e72c1403e103b45Db9da5B9D2B", "1": "0x0e9134467A273De42BE82D8764BF1E9cC0e0c8Ba", "2": "0x10638C31Daeee246f0026f7174E1f30fB17010F5", "3": "0xa2eC40E5e60d71144e16C92A4C78F8b38FEA7877", "4": "0x1dA981865AE7a0C838eFBF4C7DFecb5c7268E73A", "5": "4500", "6": "6000", "7": "10850", "8": "2000", "9": "18", "10": true, "11": false, "12": true }- Calldata
- Target
- 0xa50b…9ca9
- Value
- 0 wei
- Function
- setAssetSources(address[],address[])
- Arguments
{ "0": [ "0x4e3FBD56CD56c3e72c1403e103b45Db9da5B9D2B" ], "1": [ "0xC9CbF687f43176B302F03f5e58470b77D07c61c6" ] }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- ARC - Consolidate Aave V1, V2 & AMM Reserve Factors, Purchase CVX and Deploy to Earn Yield ↗discourse · high confidence
Arguments for
- The Aave treasury's reserve factor holdings are largely unproductive and should be consolidated and deployed to earn yield beyond simple aToken returns.— MatthewGraham, Dydymoon
- Acquiring CVX and veCRV gives Aave metagovernance influence over Curve gauge weights, which can boost CRV incentives on Aave-related pools and create a virtuous flywheel for aToken liquidity and TVL.— MatthewGraham, Dydymoon, 0x7751, JeanBrasse
- The initial $2M CVX allocation is too conservative; Aave should buy at least $5M worth of CVX upfront to clear voting hurdles immediately and gain broader governance influence (including over other protocols like Frax).— JeanBrasse, Dydymoon
- An Enzyme vault could solve execution, delegation, and operational concerns by letting Llama manage the portfolio under pre-defined risk controls without telegraphing every move or requiring a governance vote per transaction.— 0x7751
- General enthusiasm for finally putting the treasury to work and expanding this approach to other markets like Polygon and Avalanche.— capncook, oneski22, Donzo
Arguments against
None surfaced.
Unresolved concerns
- Allocating 94.4% of the treasury with over two-thirds concentrated in Convex creates significant smart contract and counter-party risk, and insurance options (e.g., Nexus Mutual) cannot cover deployment at this scale.— fig, eboado, oneski22
- There is no clear governance framework for day-to-day metagovernance voting decisions—whether via full DAO votes, an internal committee, or a delegate like Llama—and what accountability structures (term limits, reporting, compensation) should apply.— fig, 0x7751, oneski22
- Long-term dependency on Convex is risky: as CVX/Convex yields potentially erode over time, unwinding a large, publicly visible position would be slow and market-disruptive, and the treasury could end up holding a large CVX position with only speculative value.— eboado, 0x7751
- The operational implementation plan is complex and lacks detail on which transactions require governance votes, who will execute them, and what security review process will be used for the underlying contracts.— eboado, 0x7751
- Fundamental skepticism about normalizing systematic governance bribing dynamics (à la Convex/Curve wars) as an appropriate strategy for Aave, versus simpler alternatives.— eboado
Notable participants
- MatthewGrahamCo-author of the proposal (Llama Community), laid out the full strategy and responded to technical questions.
- DydymoonCo-author of the proposal who engaged with feedback and agreed to increase the CVX allocation.
- JeanBrasseProposed increasing the CVX purchase to $5M and outlined the strategic rationale for larger governance influence.
- figRaised early concerns about concentration risk, insurance, and governance/voting process for metagovernance assets.
- oneski22Responded to insurance feasibility concerns and suggested a committee-based voting model similar to BadgerDAO/IndexCoop.
- eboadoRaised deeper concerns about long-term Convex dependency, market risk of CVX, and requested implementation/security details.
- 0x7751Representing Avantgarde/Enzyme, proposed a vault-based solution to address delegation, operational, and rebalancing concerns; followed up later without response.
- capncookSuggested extending similar treasury strategies to the Polygon market given multi-chain expansion of Curve/Convex.
- DonzoBrief supportive comment with no substantive argument.
Generated by Kvorum
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