Proposal To Launch Aave V3 Instance On Ethereum Mainnet

Summary

The purpose of this proposal is to deploy a World Liberty Financial Aave v3 instance for the World Liberty Financial Protocol. This instance will be managed through external risk managers and will be built on the existing Aave v3 infrastructure and will launch on Ethereum Mainnet.

WLFI Protocol Description

The WLFI Protocol will provide liquidity for Ethereum, Wrapped Bitcoin, certain stablecoins, and potentially other digital assets. WLFI will make the WLFI Protocol Aave instance available to WLFI Protocol users, and the WLFI Protocol Aave instance will be managed through Aave risk management. WLFI seeks to introduce a new class of users to over-collateralized borrowing and lending, one of the most important DeFi functionalities. WLFI intends to onboard new users into DeFi by providing seamless user experiences for supplying and borrowing against digital assets. Many of these users will be first-time DeFi users, which will build brand loyalty and recognition for both WLFI and Aave. This is intended to help make and keep Aave a market leader in the digital asset borrowing and supply space.

Initially, the WLFI Protocol will allow USDC, USDT, ETH, and WBTC for both borrowing and lending. Additional assets may be added through future WLFI voting proposals.

WLFI will utilize the same reserve factor system in this Aave v3 instance as is maintained in the main Aave instance. AaveDAO will receive 20% of the protocol fees generated by the WLFI Aave v3 instance and will also receive approximately 7% of the total supply of $WLFI tokens for participation in future WLFI Governance procedures, liquidity mining and promoting decentralization of the WLFI platform. The revenue split will be set up using a trustless smart contract that directs the appropriate percentage of protocol fees to the AaveDAO treasury and WLFI treasury addresses.

The Aave risk managers will dynamically adjust ETH and WBTC supply caps based on stablecoin liquidity to seek to ensure stablecoin borrowing remains viable. Users of the WLFI Protocol will receive $WLFI tokens for participating in the WLFI Protocol, subject to any restrictions under applicable law.

This proposal shall be deemed passed if it receives approval from a simple majority of the total votes cast. A simple majority is defined as more than 50% of the valid votes in favor of the proposal, with the remaining votes being either against or abstained.