[ARFC] sDAI Aave V3 Onboarding

Title: [ARFC] sDAI Aave V3 Onboarding

Author: Marc Zeller @marczeller - Aave Chan Initiative, Chaos Labs

Date: 2023-08-09

Summary:

This proposal seeks to onboard sDAI as a collateral-only asset into the Aave V3 Ethereum pool. It outlines the specific parameters for integration and aims to create new synergies with the MakerDAO ecosystem.

Motivation:

The recent increase in the DSR (Dai Savings Rate) to 8%—though anticipated to decrease to 5%—presents a unique opportunity for Aave to forge new synergies with the MakerDAO ecosystem. By integrating liquid DSR deposit tokens (sDAI) as a collateral-only asset in the Aave V3 Ethereum pool, Aave can offer users the dual benefit of earning DSR yield while utilizing their assets as collateral. In the context of GHO, this integration would create a yield-generating stablecoin with a higher yield than the GHO borrow cost. It's important to note that this proposal does not conflict with the DSR integration in aDAI reserve proposal, but rather complements it. However, current engineering constraints make immediate integration difficult in the short-term. Should governance approve this proposal, both sDAI and DAI would serve as reserves in the Aave V3 Ethereum pool, with sDAI primarily used as collateral and DAI as a borrowable asset.

Specification:

We propose the following modifications to the Aave V3 & V2 Ethereum pools:

sDAI contract: 0x83F20F44975D03b1b09e64809B757c47f942BEeA

Parameter	Value
wETH Optimal Ratio on V3	from 80% to 90%
wETH slope 1 on V3	from 4.8% to 3.8%
DAI RF on V2	from 15% to 25%
DAI RF on V3	from 10% to 20%
DAI optimal ratio on V3	from 80% to 90%
DAI Slope1 on V3	from 4% to 5%
DAI optimal ratio on V2	from 80% to 90%
DAI Slope1 on V2	from 4% to 5%
DAI stable Borrow	disabled on V2
sDAI parameters	same as DAI but as collateral only
LTV	77%
LT	80%
Liquidation penalty	4.5%

Disclaimer:

The Aave-Chan Initiative & Chaos Labs are not affiliated with or paid by MakerDAO to publish this ARFC. At the time of writing, The ACI has large parts of its own treasury in the DSR, intending to use sDAI as collateral to mint GHO.

Next Steps:

1. If Snapshot outcome is YAE approved, Escalate to AIP stage

Copyright:

Copyright and related rights waived via CC0.