Add TerraUSD to Aave V2

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aip: title: Add TerraUSD to Aave V2 status: ARC posted, pending snapshot vote author: @larry0x shortDescription: Create a new Aave V2 market for UST ARC discussion: https://governance.aave.com/t/add-support-for-terra-usd-ust/6003 created: 2021-11-09 updated: N/A

Simple Summary

TerraUSD (UST) is an algorithmic, seigniorage-based stablecoin issued on the Terra blockchain. Its market capitalization has grown to almost $2.8B since its inception on October 1. UST is designed such that each UST can be redeemed for $1 of LUNA, and vice versa. This has kept the price close to the peg, which is essential for a stablecoin.

Motivation

Terra is committed to a multi-chain strategy and as such are motivated to find vibrant borrowing/lending markets for UST on all of the chains where UST is supported. Ethereum continues to be the top destination for assets from the Terra ecosystem.

UST is supported by major dApps including Curve, Uniswap, Sushi, Harvest, etc. UST can also be deposited into Mirror Protocol mAsset pools on Uniswap, and is depositable into Anchor via EthAnchor. We believe there will be sufficient demand for borrowing/lending given the variety of existing use cases.

Finally, as referenced earlier, Terra has begun its migration from its centrally held bridge to Wormhole. This move should lower the centralization risks associated with UST while increasing its adoption case as it reaches more chains via Wormhole in the future.

Proposed Parameters

UST will be used both as collateral and for borrowing. We proposed the same parameters used for DAI:

export const strategyUST: IReserveParams = {
  optimalUtilizationRate: new BigNumber(0.8).multipliedBy(oneRay).toFixed(),
  baseVariableBorrowRate: new BigNumber(0).multipliedBy(oneRay).toFixed(),
  variableRateSlope1: new BigNumber(0.04).multipliedBy(oneRay).toFixed(),
  variableRateSlope2: new BigNumber(0.75).multipliedBy(oneRay).toFixed(),
  stableRateSlope1: new BigNumber(0.02).multipliedBy(oneRay).toFixed(),
  stableRateSlope2: new BigNumber(0.75).multipliedBy(oneRay).toFixed(),
  baseLTVAsCollateral: '7500',
  liquidationThreshold: '8000',
  liquidationBonus: '10500',
  borrowingEnabled: true,
  stableBorrowRateEnabled: true,
  reserveDecimals: '18',
  aTokenImpl: eContractid.AToken,
  reserveFactor: '1000'
};

Reference

About Terra:

• Terra
• Whitepaper
• Docs
• Terra github
• Etherscan
• ChainLink Oracle: WIP
• Audits: CertiK Security Leaderboard - Terra
• Terra communities: Telegram Discord
• About Terra’s plans to migrate from Shuttle to Wormhole

About Wormhole:

• Website, token bridge, and other helpful Wormhole links
• About Wormhole
• Wormhole’s github
• Wormhole’s discord
• Wormhole’s Twitter