[AAVE] [ARFC] Upgrade Safety Module with StkGHO
Title: [ARFC] Upgrade Safety Module with StkGHO
Author: Marc Zeller - ACI (Aave Chan Initiative)
Date: 2023-11-21
Summary
This ARFC introduces an enhancement to the Safety Module by integrating a GHO Safety Module. This new category aims to mitigate risks using GHO’s stablecoin attributes for potential shortfall events within its ecosystem. It also reduces the Safety incentives for StkAAVE and StkBPT.
Motivation
AIP-366 was adopted by governance to reduce the safety incentives of StkAAVE and StkBPT, but an implementation bug made the AIP execution impossible. After discussion with DAO service providers, it was decided to bundle the re-run of 366 with the creation of the GHO safety module and the StkGHO asset.
The GHO Safety Module will fortify the Aave Protocol's resilience by adding a stablecoin asset, which is inherently less volatile than AAVE. This strategic move diversifies the Safety Module's capacity to absorb shocks from various risk vectors in case of shortfall events.
The GHO Safety Module will target a liquidity pool of 9M GHO with an APR range of 12-15%, achievable with a daily emission of 35 AAVE/day over a 90-day period. The module will have a slashing rate set at 100%, meaning the entirety of the deposits could be utilized in a shortfall event, with socialized coverage among StkGHO holders. The cooldown period is adjusted to 10 days, which is suitable for a stablecoin.
Specification
Revised Safety Module Emissions Rate:
| Asset | Previous Emissions | Proposed Emissions |
|---|---|---|
| StkAAVE | 550 AAVE/day | 385 AAVE/day |
| StkBPT | 550 AAVE/day | 385 AAVE/day |
| StkGHO | N/A | 35 AAVE/day |
- GHO Safety Module Parameters:
- Target Liquidity: 9M GHO
- Target APR: 12-15%
- Emissions Period: 35 AAVE/day over a 90-day cycle
- Slashing Rate: 100%
- Cooldown Period: 10 days
Next Steps
- If the ARFC snapshot outcome is YAE, proceed to the AIP stage.
Disclosure
The Aave-chan Initiative is not presenting this ARFC on behalf of any third party and has not been compensated for creating this ARFC.
Copyright
Copyright and related rights waived under Creative Commons Zero (CC0).
Off-Chain Vote
YAE
10 HVAXVC90.9%
NAY
1 HVAXVC9.1%
ABSTAIN
0 HVAXVC0%
Timeline
Nov 27, 2023Proposal created
Nov 28, 2023Proposal vote started
Nov 30, 2023Proposal vote ended
Apr 09, 2026Proposal updated