I’d like to voice my support for this proposal after revisions were made based on community feedback. 
The exclusion of the GHO scope, the KPI-based compensation, and the ability to cancel the contract after 6mos are all thoughtful additions that address a lot of the commentary on the original proposal.
I know some folks might have “sticker shock” at the pricing but remember that DAOs don’t run magically…they need real people doing real work…executing at a high level. Especially +$1B DeFi protocol DAO like Aave. Many DeFi protocols would just perform these duties as part of the attached corporate company, and this cost would be in line with those functions. Instead, Aave is one of the more decentralized protocols in the space (maybe only topped by Maker?) with many independent groups like Gauntlet, BGD, and others contributing to core functions.
Llama offering its services as another provider in the Aave ecosystem should be welcomed since there are very few orgs with these capabilities in the space…and certainly no orgs with Llama’s track record. So I voice my support for this revised proposal. And we can take a look in a couple quarters and make sure it’s a win-win for all stakeholders and revise as necessary. Let’s get to work, learn, iterate, and keep growing! 
I think the proposal is more reasonable and transparent at the moment, with a slightly reduced budget and clarity on the personnel involved, given the heterogeneous nature of the work.
Considering that Llama always did quality contributions to the community and the partial variable budget with quite strict KPIs evaluation, I support the proposal to pass to a voting phase by the community.
P.S. it is getting clear that on so heterogeneous scopes (treasury management, growth, data, etc), will get more and more difficult to make an educated opinion/vote. This gets accentuated by the fact that multiple entities on the previous thread present limited-scope “counter-offers” (which I think is healthy). In my opinion, something needs to change on this, because I believe that even for people really active in governance in this forum, it is really difficult to do evaluations.
At the moment I’m not sure which is the best solution, but think that soon will be unavoidable to define better the needs of the DAO in certain fields, more abstract in nature than others. And from there, request “quotes” or proposals from reputable firms in the specific field.
Llama has a clear history with Aave, so I think a vote of trust is deserved. But still certain procedures should change.
I similarly support this revised proposal:
Llama team and @HelloShreyas invested time to incorporate feedback from multiple stakeholders: delegates, BGD, Aave Co, myself, and others. They have been long-standing contributors to Aave.
The amended scope is reasonable and further aligns the DAO and Llama team through KPIs, while driving valuable insight and services over 12 months.
I am grateful for Llama’s willingness to incorporate community feedback to form a fair and more streamlined proposal. This version helps answers uncertainty from before.
Summary
We outlined a 12-month proposal to work with Aave on treasury management, protocol upgrades, growth, and analytics.
We received a lot of positive interest and feedback from the community. Based on the feedback, we incorporated the following changes:
The Proposal
Context
Llama is one of the most active contributors to Aave. We hope to deepen our engagement with the community and ensure that Aave is a market-leading protocol for many decades to come.
Aave currently has $9 billion of liquidity locked across 7 networks and over 13 markets, with more in the works. Aave DAO has supported community initiatives like Aave Grants DAO, Bored Ghost Developing (BGD), and Gauntlet, which have served to advance the protocol.
To continue its rate of growth, the community needs to onboard proven contributors who can drive value to the Aave ecosystem. Skilled teams that have the knowledge, trust, and alignment can meaningfully contribute to growing Aave.
Llama has received grants from Aave Grants DAO over the past 12 months for work that includes treasury management, protocol upgrades, DAO to DAO partnerships, and analytics. Aave Grants has recommended that we move from short-term grants to a longer-term work scope funded through governance, allowing us to drive more impact to the Aave ecosystem.
It should be noted that many of the deliverables in this proposal require substantial smart contract engineering and financial expertise. We will have the following people allocated to our work with Aave: two smart contract engineers, one backend engineer, one frontend engineer, one DeFi strategist, one data scientist, and one accountant.
Llama
Overview
Llama works with DAOs on protocol engineering, treasury allocation, and analytics. Our customers include Aave, Nouns, Uniswap, dYdX, Lido, Gitcoin, Maker, Radicle, PoolTogether, and FWB. We have implemented protocol upgrades, built treasury strategies and liquidity incentive programs, created bidding interfaces and on-chain indices, and built analytics dashboards and financial reports.
Our Values
Previous Work with Aave
A selection of our work with Aave includes:
The Proposal
Llama complements BGD, Gauntlet, and others who might emerge by offering support to grow the Aave ecosystem. We focus on treasury management, analytics, and growth.
The tables below provide the initiatives with which Llama plans to support Aave.
Treasury Management and Analytics
Work with other communities to determine if they are a good match for the Aave community and Aave’s vision/future intentions. Coordinate and deploy all on-chain proposals across necessary platforms.
E.g. Acquire BAL, deploy to B-80BAL-20WETH, then deploy into veBAL and coordinate / implement DAO voting on BAL incentive distribution.
Deploy a portion of the DAO’s funds across diversified strategies of varying risk profiles to earn yield across many networks while maintaining sufficient stablecoin runway and optimizing risk exposure.
Preference will be given to acquiring tokens that provide extra utility to the DAO beyond governance influence. Llama will optimize for the intersection of risk, including smart contract surface area, and return on investment. These strategies will be biased towards retaining the accrued governance token yield.
Position Aave’s assets to bolster revenue growth. Utilize assets from the Reserve Factor to unlock and promote the growth of Aave markets and revenue.
Explore and implement ways to provide downside protection to the Ecosystem Reserve.
Reduce asset price exposure through hedging, which may include using derivatives on a rolling basis, to protect against adverse market conditions.
E.g. hedging downside price exposure of the Ecosystem Reserve whilst the Safety Module is heavily concentrated in AAVE.
Make periodic calls to claim Aave V3 revenue to Aave’s treasury.
Llama will make periodic calls on Optimism, Arbitrum, Avalanche, and Polygon to ensure that revenue goes to Aave’s treasury.
Create various optimizations for the SM to ensure that it functions with Aave’s increased TVL.
Deploy an upgrade to improve the capital efficiency of the SM and maximize the dollar value of the backstop.
Provide detailed analysis of the SM’s historical and current performance relative to TVL, market conditions, and market volatility.
Model the effect of a shortfall event on the SM’s backstop and AAVE token price.
Provide analysis that will shape investment, amongst other, decisions across the DAO.
Model expenses and revenues under various market conditions. Liaise with other members of the DAO to create a comprehensive forecast of the DAO’s finances. Draw upon input from community members who have received AIP funding and those delivering material improvements across the Aave ecosystem.
Develop a live, customized, and transparent financial reporting backend solution for Aave.
This will enable live financial reporting for the various Aave markets and Aave DAO as a whole.
Publish financial reporting statements enabled by the data warehouse.
Provide periodic token distribution analyses, transparency on outflows, and more economic analyses. In time, this will be expanded to cover the Aave Grants DAO as well.
Provide visibility into each investment strategy, its performance, and associated risks.
Share this data through reports on the forum and a dedicated website alongside other financial reporting data.
Model various risk scenarios to ensure the DAO has exit strategies during periods of market turbulence.
Growth
Upgrade the Aave ARC market to include a liquidity mining module.
Work with Balancer to bring a new type of productive collateral to Aave markets and subsequently roll it out across the various Aave V3 deployments.
E.g. Create ERC-4626 strategies that enable BPTs to be deposited whilst enabling users to earn rewards as if the BPT was deposited into an Aura gauge.
Bolster the adoption of Aave’s tokens across DeFi by supporting initiatives that build on top of Aave markets or integrations that create TVL for Aave markets.
This will span liquidity growth and the integration of AAVE and aTokens into other protocols.
E.g. Create linear pools on Balancer V2 that deposit tokens into Aave markets to earn yield (for example, bb-a-USD).
Enable AAVE and stkAAVE holders to participate in metagovernance by voting on proposals within other communities in which Aave DAO holds tokens.
Support asset listings by providing a qualitative risk analysis report on the forum that details the initial risk parameters.
Adopt any risk parameters suggested by Gauntlet, provided borrowing is enabled at launch.
Note that we only charge Aave for risk assessments of specific assets, not for the AIPs and coordination involved outside of the risk assessment. We will liaise with individual communities and support new asset listings, with all efforts outside of the risk assessment funded by those respective communities.
Note that we have excluded GHO from the scope of this proposal but plan to support it with a separate proposal after it is launched.
Compensation Model & KPIs
Llama charges a $1.5 million base fee for 12 months plus a KPI-based bonus of $0-500k. 70% of the total fee will be in USDC and 30% in AAVE.
The base fee is broken down into two components:
The AAVE held in Llama’s treasury will be used to participate in governance.
The KPI-based bonus is paid at the end of our 12-month contract based on the accomplishment of deliverables listed in our proposal. 70% of the bonus will be in USDC and 30% will be in AAVE.
The bonus payment portion in AAVE will be calculated based on a 30-day TWAP at the end of the 12-month period.
Besides milestone completion, general KPIs we focus on include:
Note that Aave DAO has the ability to cancel Llama’s contract and stream after a 6-month period. We will provide a detailed report on our progress that should give the community sufficient information to make that decision.
Engagement Expectations