Aave Generalized Risk Stewards (AGRS) activation

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Created

6 Nov 2024, 10:17 AM

Open for voting

7 Nov 2024, 10:41 AM

Voting closed

10 Nov 2024, 10:41 AM

Passed

Finished

12 Nov 2024, 4:46 AM

Executed

Aave Generalized Risk Stewards (AGRS) activation

Created

6 Nov 2024, 10:17 AM

Open for voting

7 Nov 2024, 10:41 AM

Voting closed

10 Nov 2024, 10:41 AM

Passed

Finished

12 Nov 2024, 4:46 AM

Executed

Author

BGD Labs (@bgdlabs)

Creator

bgdlabs.eth

Copy

Simple Summary

Expanding from the scope of CapsPlusRiskSteward, we now introduce the new Aave Generalized Risk Stewards (AGRS), allowing hardly constrained risk parameter updates by risk service providers and reducing governance overhead.

Aave Generalized Risk Stewards (AGRS) include two instances: Manual AGRS and Automated AGRS. Manual AGRS is a continuation of the previous design, with the parameters recommendation risk provider, with constrained capacity to modify all types of risk parameters on Aave. Automated AGRS is a pilot version to automate interest rate updates of assets (starting with WETH on Aave v3 Lido Ethereum), based on the newly released risk infrastructure technology Edge, by Chaos Labs.

This AIP activates the Manual AGRS and the Automated AGRS will be activated at a later stage.

Motivation

Aave's decentralized governance system, while robust, creates significant operational overhead and cost due to its comprehensive proposal process. This process includes pre-AIP procedures, payload creation, multiple reviews, voting, and on-chain verification. While recent improvements have optimized some steps, further efficiency gains are possible, particularly in risk-related proposals.

The rationale for reducing risk-related proposals:

  • Two experts, and independent risk teams (ChaosLabs, LlamaRisk) are engaged with the DAO.
  • Historical voting unanimity on non-controversial, incremental risk proposals.
  • Technical feasibility of constraining updates using Aave v3 roles and specific validations.

The success of the CapsPlusRiskStewards experiment demonstrates the viability of expanding this approach. As Aave expands to new networks, minimizing governance proposals becomes crucial to prevent voter fatigue.

Specification

The new Manual AGRS we propose follows the same design as the CapsPlusRiskSteward, a smart contract to which the Aave Governance gives RISK_ADMIN role over all v3 instances, controlled by a 2-of-2 multisig, and heavily constrained on what can do and how by its own logic.

The 2-of-2 multisig controlling the Manual AGRS will have Chaos and BGD Labs as signers, temporarily including BGD Labs as a matter of extra security procedure.

ACL_MANAGER.addRiskAdmin() is called to add the new Manual AGRS.

Additionally, params for GHO on Arbitrum and Ethereum cannot be changed by this Manual AGRS, as the params will be updated by the GhoStewards instead, this is done by setting the GHO asset as restricted via the following method: RISK_STEWARD.setAddressRestricted();

To give some extra buffer and protection, we will remove the RISK_ADMIN role from the old CapsPlusRiskSteward once risk providers have adapted to use the new Risk Stewards.

Deployed AGRS Contracts:

The new risk stewards have been configured with the following risk params on all Aave instances:

ParameterPercent change allowedminimumDelay
Supply and Borrow Caps100% (relative change)3 days
Debt Ceiling20% (relative change)3 days
LST Cap adapter params5% (relative change)3 days
Stable price cap0.5% (relative change)3 days
Base Variable Borrow Rate0.5% (absolute change)3 days
Slope 10.5% (absolute change)3 days
Slope 25% (absolute change)3 days
Optimal Point (Kink)3% (absolute change)3 days
Loan to Value (LTV)0.25% (absolute change)3 days
Liquidation Threshold0.25% (absolute change)3 days
Liquidation Bonus0.5% (absolute change)3 days

References

Copyright

Copyright and related rights waived via CC0.

by BGD Labs