FIP-22: Aave Borrowing Incentives

Forum Discussion

https://tribe.fei.money/t/fip-22-aave-borrowing-incentives/3449/3

Summary

Allocate 4M TRIBE to Aave FEI borrow incentives for 6 months

Motivation

Aave was the most approved incentives program behind the current FEI-TRIBE LP rewards on this snapshot:

This would indicate broad community support for pursuing incentives.

Here are the main constraints:

• We need to use Aave’s Incentives controller
• Aave’s controller distributes per second instead of per block like the TribalChief, so streaming is complex
• If Fei Protocol supplies FEI as planned, the protocol would be forced to farm the TRIBE rewards
• All incentive changes in distribution rate and incentivized tokens need to come from the DAO

For these reasons, the only viable way to apply incentives to AAVE is to allocate a single chunk of TRIBE rewards to be distributed with a target end date in mind. This approach would mean Aave cannot be a part of the TribalChief incentives program as those rewards change as new programs are added and are calculated per block.

Additionally, we should only incentivize borrowing so that we avoid farming our own TRIBE rewards as a DAO. The benefits of incentivizing borrowing are that it stimulates the demand side for FEI on one of the largest lending platforms. It helps subsidize using FEI for leverage to compete with DAI, USDC, and USDT.

Specification

1. Withdraw 4 million TRIBE from the FeiRewardsDistributor and send to the AaveIncentivesController for TRIBE.
2. Update the AaveIncentivesController to have an end date of March 1, 2022 and an emissions/s rate of 4m TRIBE/total seconds (updated at proposal time) exclusively for FEI variable rate borrowing.

Development will be carried out by @joey and code review by the Aave core team.

Voting Rules

Voting will last 2 days. This is a non-binding signal vote. Please keep in mind that snapshot votes can be changed but not withdrawn until the end of the voting period.

The three options to vote on are:

• Yes - allocate 4M TRIBE incentives to Aave borrowing FEI for 6 months
• No - do not allocate incentives to Aave
• More Discussion

This is a single choice vote, if Yes wins with greater than 50% approval and 10M TRIBE quorum, the proposal will be submitted to the DAO contingent on FEI's inclusion on Aave as a borrowable asset.