Summary

This proposal presents Aave the opportunity to onboard CRV to the Ethereum v3 Liquidity Pool.

Abstract

CRV is a strategic asset to Aave and any CRV earned from the pool could be used by Aave to support bootstrapping the adoption of GHO, StakedAToken and in the long term, perhaps help incentivize the Safety Module too.

The risk parameters provided within have been reviewed and endorsed by Gauntlet.

Motivation

Listing CRV on Aave v3 Ethereum compliments the community’s recent on-market purchase of CRV to repay the excessive debt created on v2 Ethereum. CRV is a material contributor to Aave’s revenue through the continual borrowing demand for CRV. With serveral v2 CRV reserves being frozen, Month on Month revenue has fallen significantly in recently months.

The Polygon v3 deployment is the only liquidity pool with Borrowing enabled. The chart below shows how deposit rates on this deployment have been affect by the freezing and disabling borrowing on Polygon v2 and Ethereum v2 respectively during late November 2022.

By listing CRV on v3 Ethereum and with a suitable BorrowCap in place, users will have the ability to migrate there positions from v2 to v3.

Any CRV earned by Aave can be used in a number of different ways, with examples shown below:

• Treasury yield
• GHO adoption
• StakedAToken adoption
• Support Safety Module yield

How the CRV will be used is open for discuss and implementation via a separate proposal.

The risk parameters presented have been reviewed by Gauntlet and a supportive comment can be found on the forum.

The interest rate curve parameters have been sourced from Llama’s ARFC CRV Interest Rate Curve Upgrade post and have also been reviewed by Gauntlet.

Specification

Ticker: CRV

Contract Address: 0xD533a949740bb3306d119CC777fa900bA034cd52

Risk Parameter	Value
Isolation Mode	YES
Enable Borrow	YES
Enable Collateral	YES
Loan To Value	55.00%
Liquidation Threshold	61.00%
Liquidation Bonus	8.30%
Reserve Factor	20.00%
Liquidation Protocol Fee	10.00%
Borrow Cap	7.70M
Supply Cap	62.50M
Debt Ceiling	20.90M
Variable Base	3.00%
Variable Slope1	14.00%
Variable Slope2	300.00%
Uoptimal	70.00%
Stable Borrowing	Disabled
Stable Slope1	8.00%
Stable Slope2	300.00%
Base Stable Rate Offset	3.00%
Stable Rate Excess Offset	5.00%
Optimal Stable To Total Debt Ratio	20.00%

Implementation

Test cases can be found here

Payload Implementation can be found here

Proposal Payload deployed address can be found here

Interest Rate Strategy deployed address can be found here

Security Considerations

The proposal Payload was reviewed by Bored Ghost Developing.

Governance Considerations

Aave governance forum discussion, Snapshot vote and Risk Service Provider feedback.

Copyright

Copyright and related rights waived via CC0.