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aip: title: Add ENS to Aave V2 status: ARC posted, Snapshot pending author: 🔥_🔥 shortDescription: Create a new Aave V2 market for the ENS governance token discussions: https://governance.aave.com/t/arc-add-ens-as-collateral/6342/4 created: 2021-11-28

ARC: Add ENS as collateral

Summary

ENS (Ethereum Name Service) is an critical piece of infrastructure for the Ethereum ecosystem with over 400,000 names registered and hundreds of intergrations across the ecosystem.

$ENS is the governance token providing ownership over the ENS protocol. $ENS governs the direction of the ENS treasury as well as controlling crucial protocol parameters via the ENS registrar controller.

This proposal looks to onboard $ENS as a collateral asset to Aave.

Motivation

Following conversations with Aave and ENS core team members, we’ve found that ENS is a prime candidate for Aave, already having gathered over $1B in circulating market cap and millions of dollars in liquidity across the ecosystem.

The addition of ENS to Aave lending markets will unlock additional liquidity and optionality for all ENS holders.

Benefits to Aave Community

ENS is a highly reputable multi-billion dollar protocol with a significant amount of liquidity on Ethereum. The addition of ENS will provide Aave with an increase in bandwidth and utility for the protocol.

In addition, the Aave community should be aligned with the addition of ENS token given a significant amount of the Aave community also hold ENS names (and ENS tokens as a result of the retroactive distribution).

Specification

Linked in forum post.

Proposed Risk Parameters

• LTV: 50%
• Liquidation Threshold: 60%
• Liquidation Bonus: 8%
• Reserve Factor: 20%

Resources

• Website
• Twitter
• Mirror
• Docs
• Github
• Token Contract