Should Aave deploy strategies on sidechains too or mainnet strategies only ?

Proposer: Llama (dydymoon)

Summary:

Llama proposed an initial treasury strategy to productively deploy Aave’s treasury. This Snapshot proposal is a follow-up to request the Aave community’s feedback on whether we should implement Aave treasury strategies on sidechains or on mainnet only. The pros and cons of both options are outlined below.

Background

Most of the Aave’s treasury is on Ethereum mainnet. The mainnet treasury is split between Aave V1 and Aave V2 + AMM market.

• Aave V1 reserve factor: 0xe3d9988f676457123c5fd01297605efdd0cba1ae ($865K)
• Aave V2 + AMM reserve factor: 0x464c71f6c2f760dda6093dcb91c24c39e5d6e18c ($20.9M)

But Aave’s treasury on other chains is growing too:

• Aave Polygon RF: 0x7734280a4337f37fbf4651073db7c28c80b339e9 ($7.1M)
• Aave Avalanche RF: 0x467b92af281d14cb6809913ad016a607b5ba8a36 ($660K)

This proposal solicits community feedback in order to propose strategies that fit Aave DAO’s preferences.

Option 1: Build a strategy on each chain

Benefits:

• Avoid rebalancing the treasury
• Allow the DAO to diversify the yield
• Diversify the risk with several protocols
• Reduce gas costs

Drawbacks:

• Sidechain security is lower than mainnet security
• More protocols can increase the risk
• Implementation is complicated with several AIPs

Option 2: Group all the reserve factor together and focus on mainnet strategies:

Benefits:

• Easier implementation (less strategies, less AIPs)
• Mainnet security

Drawbacks:

• Higher gas costs
• Need to rebalance all RFs to Aave V2 periodically
• Less yield opportunities

The goal of this poll is to know if the community would like to start implementing Aave strategies on each chain or on mainnet only.

If the community votes for Option 1, we will build strategies on each chain - Polygon and Avalanche today. Aave need not keep assets on sidechains in perpetuity. If there is a better yield opportunity on mainnet, Aave would still be able to bridge funds on mainnet.

However, if Option 2 is voted, Llama should focus on building strategies on mainnet only.