Aave

Simple Summary

This AIP shall implement the following parameter adjustments:

• Increase Slope1 across Polygon v2 by 75bps;
• Increase Reserve Factor (RF) on Ethereum v2 and Avalanche v2 by 5.00%; and,
• Increase USDC.e and USDbC RF by 5.00% on Arbitrum, Optimism, Polygon, Base and Gnosis.

Motivation

This AIP will reduce deposit yield for assets on Ethereum v2 and Avalanche v2 instances of Aave Protocol by increasing the RF by 5.00%. By increasing the RF a greater portion of the interest paid by borrowers is directed to the Aave DAO’s treasury.

This results in a lower deposit rate for users and encourages migration from v2 instances of the Aave Protocol to v3. User’s funds are not at risk of liquidation and the borrowing rate remains unchanged.

The RF across all USDC.e and USDbC reserves will be increased by 5.00% to encourage migration from bridged USDC to native USDC on each respective network.

By increasing the Slope1 parameter by 75bps on Polygon v2, the cost of capital to users increases and further encourages migration to Polygon v3.

Specification

Slope1 Parameter 75bps Increases:

Asset	Market	Current Slope1	Proposed Slope1
DAI	Polygon v2	13.50%	14.25%
USDT	Polygon v2	13.50%	14.25%
wBTC	Polygon v2	8.50%	9.25%
wETH	Polygon v2	8.50%	9.25%
USDC	Polygon v2	13.50%	14.25%
wMATIC	Polygon v2	10.50%	11.25%

Reserve Factor 5.00% Increases:

Asset	Market	Current RF	Proposed RF
DAI.e	Avalanche v2	70.00%	75.00%
USDC.e	Avalanche v2	70.00%	75.00%
USDT.e	Avalanche v2	70.00%	75.00%
wAVAX	Avalanche v2	70.00%	75.00%
WBTC.e	Avalanche v2	75.00%	80.00%
WETH.e	Avalanche v2	70.00%	75.00%
DAI	Ethereum v2	75.00%	80.00%
LINK	Ethereum v2	80.00%	85.00%
USDC	Ethereum v2	75.00%	80.00%
USDT	Ethereum v2	75.00%	80.00%
wBTC	Ethereum v2	80.00%	85.00%
wETH	Ethereum v2	75.00%	80.00%
USDC.e	Arbitrum	40.00%	45.00%
USDC.e	Optimism	40.00%	45.00%
USDC.e	Polygon	40.00%	45.00%
USDbC	Base	40.00%	45.00%
USDC.e	Gnosis	15.00%	20.00%

References

• Implementation: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis
• Tests: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Polygon, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis
• Discussion for USDCe updates
• Snapshot for USDCe updates
• Discussion for Ethereum V2 Reserve Factor Updates
• Snapshot for Ethereum V2 Reserve Factor Updates
• Discussion for Avalanche V2 Reserve Factor Updates
• Snapshot for Avalanche V2 Reserve Factor Updates
• Discussion for Polygon V2 Borrow Rate Updates
• Snapshot for Polygon V2 Borrow Rate Updates

Copyright

Copyright and related rights waived via CC0.