Aave

Simple Summary

This proposal aims to onboard USDS, the rebranded DAI token to Aave v3 Ethereum Main and Lido Pool.

Motivation

DAI has been a cornerstone asset in the Aave ecosystem, with a long and successful history of supply across various versions of the protocol. MakerDAO marked a significant milestone with a rebranded to Sky, introducing USDS as the new iteration of DAI. Given the established track record and widespread adoption of their predecessors, we propose to onboard these new assets to Aave v3.

By integrating USDS into Aave v3, we aim to maintain continuity for users who have relied on DAI while embracing the evolution of these assets under the Sky brand.

Specification

Risk Parameters for *USDS**

USDS (Lido and Main Instances) Changes

Oracle Updates:

• USDS: Implementing a CAPO DAI/USD feed due to expected liquidity conditions on launch and bidirectional migration with DAI.

Interest Curve and Reserve Factor Modifications:

Following discussions with Sky teams and Aave DAO service providers, the following parameters have been adjusted to better suit the expected use cases of this integration:

USDS (Lido Pool):

• Reserve Factor: Decreased from 25% to 10%
• Base Variable Borrow Rate: Increased from 0% to 0.75%
• Variable Rate Slope 1: Increased from 5.5% to 6.25%
• Optimal Usage Ratio: Increased from 90% to 92%
• Collateral Usage: Disabled
• LTV, Liquidation Threshold, and Liquidation Bonus: All reduced to 0%.

USDS (Main Pool):

• Reserve Factor: Decreased from 25% to 10%
• Base Variable Borrow Rate: Increased from 0% to 0.75%
• Variable Rate Slope 1: Increased from 5.5% to 6.25%
• Optimal Usage Ratio: Increased from 90% to 92%
• Supply cap improved to 50M
• Borrow cap improved to 45M

References

• Implementation: AaveV3Ethereum, AaveV3EthereumLido
• Tests: AaveV3Ethereum, AaveV3EthereumLido
• Discussion
• Risk Recommendation 1
• Risk Recommendation 2

Copyright

Copyright and related rights waived via CC0.