[ARFC] Deploy Aave V3 to MegaETH

Summary

We are reopening the ARFC to deploy Aave V3 on MegaETH with updated terms and parameters to be defined by Risk SPs. The original thread established that MegaETH is an EVM-compatible, real-time L2 still finalizing core infra, including Chainlink oracles. As progression has been made, and the upcoming launch of MegaETH’s Mainnet approaches, the DAO should consider preparing an Aave V3 MegaETH deployment.

Motivation

Launching on MegaETH at Day 0 positions the protocol to capture the network’s earliest activity and convert it into meaningful supply and borrowing demand. Incentives distributed under governance-defined KPIs give the DAO a direct lever to tie rewards to behaviors that increase protocol revenue. The MegaETH deployment is a material revenue opportunity for the DAO, with early traction, deep liquidity, and strong utilization that can support strong revenue streams.

Specifications

Aave will be live on MegaETH at mainnet Day 0. The initial token listing and parameters have been updated based on the latest risk analyses.

Parameters	Value	Value	Value	Value	Value	Value	Value
Asset	WETH	BTC.b	USDT0	USDM	wstETH	wrsETH	ezETH
Isolation mode	No	No	No	No	No	No	No
Borrowable	No	No	Yes	Yes	No	No	No
Collateral Enabled	No	No	No	No	No	No	No
Supply Cap	50,000	120	50,000,000	50,000,000	12,000	10,000	10,000
Borrow Cap	46,000	-	46,000,000	46,000,000	-	-	-
Debt Ceiling	-	-	-	-	-	-	-
LTV	-	-	-	-	-	-	-
LT	-	-	-	-	-	-	-
Liquidation Bonus	-	-	-	-	-	-	-
Liquidation Protocol Fee	10%	10%	10%	10%	10%	10%	10%
Variable Base	0.0%	-	0.0%	0.0%	-	-	-
Variable Slope1	2.50%	-	5.0%	5.0%	-	-	-
Variable Slope2	8.00%	-	10.0%	10.0%	-	-	-
Uoptimal	90.0%	-	90.0%	90.0%	-	-	-
Reserve Factor	15%	-	10%	10%	-	-	-
Stable Borrowing	Disabled	Disabled	Disabled	Disabled	Disabled	Disabled	Disabled
Flashloanable	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Siloed Borrowing	No	No	No	No	No	No	No
Borrowable in Isolation	No	No	Yes	Yes	No	No	No
E-Mode	WETH/Stablecoins, wstETH/WETH, wrsETH/WETH, ezETH/WETH	BTC.b/Stablecoins	wstETH/Stablecoins, WETH/Stablecoins, BTC.b/Stablecoins	wstETH/Stablecoins, WETH/Stablecoins, BTC.b/Stablecoins	wstETH/WETH, wstETH/Stablecoins	wrsETH/WETH	ezETH/WETH

E-Mode Configurations

WETH Stablecoins #1

Parameter	Value	Value	Value
Asset	WETH	USDT0	USDM
Collateral	Yes	No	No
Borrowable	No	Yes	Yes
Max LTV	80.50%	-	-
Liquidation Threshold	83.00%	-	-
Liquidation Bonus	5.50%	-	-

BTC.b Stablecoins #2

Parameter	Value	Value	Value
Asset	BTC.b	USDT0	USDM
Collateral	Yes	No	No
Borrowable	No	Yes	Yes
Max LTV	70.00%	-	-
Liquidation Threshold	75.00%	-	-
Liquidation Bonus	6.50%	-	-

wstETH Stablecoins #3

Parameter	Value	Value	Value
Asset	wstETH	USDT0	USDM
Collateral	Yes	No	No
Borrowable	No	Yes	Yes
Max LTV	75.00%	-	-
Liquidation Threshold	79.00%	-	-
Liquidation Bonus	6.50%	-	-

wstETH Correlated #4

Parameter	Value	Value
Asset	wstETH	WETH
Collateral	Yes	No
Borrowable	No	Yes
Max LTV	94.00%	-
Liquidation Threshold	96.00%	-
Liquidation Bonus	1.00%	-

wrsETH Correlated #5

Parameter	Value	Value
Asset	wrsETH	WETH
Collateral	Yes	No
Borrowable	No	Yes
Max LTV	93.00%	-
Liquidation Threshold	95.00%	-
Liquidation Bonus	1.00%	-

ezETH Correlated #6

Parameter	Value	Value
Asset	wrsETH	WETH
Collateral	Yes	No
Borrowable	No	Yes
Max LTV	93.00%	-
Liquidation Threshold	95.00%	-
Liquidation Bonus	1.00%	-

CAPO

Asset	maxYearlyRatioGrowthPercent	ratioReferenceTime	MINIMUM_SNAPSHOT_DELAY
wstETH	9.68%	Monthly	7
wrsETH	6.67%	Monthly	14
ezETH	10.89%	Monthly	14

Oracles

Chainlink price feeds are available on MegaETH.

Incentive and Revenue Structure

There are two options for the incentive and revenue structure provided by MegaETH.

Option 1 - Points Program + Revenue Guarantee (with Rollover)

User Incentives

MegaETH will distribute 30 million points to Aave users on MegaETH during the mainnet launch period.

Revenue Guarantee

For each of the first 5 years after the Aave market launches on MegaETH, the DAO is guaranteed at least USD $2,000,000 per year in protocol revenue generated by the MegaETH Aave market.

• If annual revenue is below $2,000,000, MegaETH will pay the difference to the DAO within 30 days after the end of that year.
• If annual revenue exceeds $2,000,000, the excess rolls forward and counts toward meeting the $2,000,000 minimum in future years.
• There is no cap on how much excess revenue can roll forward, and excess revenue may roll over across multiple years.

Example

Year 1 revenue: $5,000,000

• $2,000,000 satisfies Year 1 guarantee
• $3,000,000 rolls forward to Year 2

Year 2 revenue: $1,000,000

• The $3,000,000 carried forward from Year 1 covers the full Year 2 guarantee
• No payment is required from MegaETH in Year 2

Option 2 - Revenue Guarantee Only (Points Not Guaranteed)

User Incentives
No points program is guaranteed under this option. However, MegaETH may, at its sole discretion, choose to run user incentive or points campaigns in the future. Any such incentives are not committed, not guaranteed, and not part of this option.

Revenue Guarantee
For each of the first 5 years after the Aave market launches on MegaETH, the DAO is guaranteed at least USD $2,000,000 per year in protocol revenue generated by the MegaETH Aave market.

• If annual revenue is below $2,000,000, MegaETH will pay the difference to the DAO within 30 days after the end of that year.
• If annual revenue exceeds $2,000,000, the excess does not carry forward and does not offset future years.

Example
Year 1 revenue: $5,000,000

• $2,000,000 satisfies Year 1 guarantee
• The additional $3,000,000 does not carry forward

Year 2 revenue: $1,000,000

• MegaETH pays $1,000,000 to reach the $2,000,000 minimum

MegaETH shall have no payment obligation unless and until the DAO approves the launch proposal and the Aave market is actually deployed on MegaETH with USDM listed under parameters defined at the AIP stage. The annual revenue guarantee period shall commence from the Aave market launch date on MegaETH. If Option 1 is selected, the points campaign will run only after the MegaETH mainnet is live and will be distributed over a defined campaign window.

Next Steps

Next steps are to collect community feedback on the preferred option, and to proceed with the risk assessment analysis for initial launch parameters and the initial asset set.

Once the community is ready to escalate this proposal to snapshot, the voting options will be:

• Option 1 (Points Program + Revenue Guarantee with Rollover)
• Option 2 (Revenue Guarantee without Rollover)
• NAE (Do not proceed with MegaETH deployment under these terms)
• ABSTAIN

Disclaimer

Aave Labs is not compensated by MegaETH, nor affiliated with them.

Copyright

Copyright and related rights waived under CC0.

Relevant Links

Original MegaETH ARFC discussion: [ARFC] Deploy Aave v3 on megaETH

MegaETH Tempcheck Snapshot: https://snapshot.org/#/s:aavedao.eth/proposal/0xab1d9c42264c89e1b8f0d807c9ff971f8c3f9f5cc0323072d9e970c110d1e39b

MegaETH Tempcheck discussion: [TEMP CHECK] Deploy Aave v3 on megaETH

BGD Technical Analysis: https://governance.aave.com/t/bgd-aave-megaeth-infrastructure-technical-evaluation/23905