Aave

Summary This proposal asks the Aave DAO to improve collateral efficiency for ETH- and BTC-family assets on Aave V3 Ethereum Core, Arbitrum, and Base, and on the Aave V4 Ethereum Main Spoke. The proposed changes raise loan-to-value (LTV) ratios, liquidation thresholds (LT), and V4 collateral factors (CF), as specified below. They also reduce the cbBTC liquidation bonus (LB) on Base from 7.50% to 6.00% and increase the parameters of Base's cbBTC Stablecoins E-Mode. LlamaRisk calibrated the recommendations against historical price movements, Chainlink feed updates, liquidation execution, and available liquidity, including the February and October 2025 stress events. Motivation Collateral parameters determine how much users can borrow and how much protection remains before a position becomes insolvent. This review assesses whether the existing ETH and BTC settings remain appropriate given observed volatility, liquidation performance, and market depth. The proposed increases aim to improve borrowing capacity while retaining buffers calibrated to each asset and deployment. Analysis The calibration uses the 99.9th percentile of adverse price excursions over a one-hour window. This window accounts for positions being worked down through successive liquidations, rather than assuming that an entire position is cleared in one transaction. Each collateral is assessed against the available debt assets on its deployment, using the most restrictive result and the applicable liquidation bonus. The proposed thresholds place WETH at its model ceiling, wstETH and weETH one percentage point below theirs, and BTC-family assets at least three percentage points below their ceilings. The additional BTC margin accounts for liquidity depth, caps, and concentration risks outside the price model. During the February and October 2025 stress events, economically meaningful liquidations were processed within minutes of the relevant oracle publication. The analysis found no bad debt for the ETH- and BTC-family collateral examined at the parameters then in place. Observed liquidation performance and exit liquidity also support applying the ETH calibration to wstETH and weETH. The calibration does not cover every historical extreme. Its residual risk includes a price move beyond the selected percentile coinciding with a prolonged interruption to oracle updates and liquidation execution. Historical performance at existing settings is evidence for the recommendation, rather than a guarantee of future outcomes at the proposed settings. Full methodology, charts, and supporting data are available in the forum discussion. Specification All values below are percentages. Arrows show current → proposed settings. Values marked unchanged are included for clarity. No other parameter changes are proposed. Aave V3 Ethereum Core | Asset | LTV | LT | LB (unchanged) | | --- | --- | --- | --- | | WETH | 80.5% → 81% | 83% → 84% | 5.00% | | WBTC | 73% → 81% | 78% → 85% | 5.00% | | cbBTC | 73% → 81% | 78% → 85% | 7.50% | | wstETH | 78.5% → 79% | 81% → 82% | 6.00% | | weETH | 77.5% → 78% | 80% → 81% | 7.00% | Ethereum Core liquidation bonuses remain unchanged. The forum proposal considers the separate liquidation protocol fee increase: reducing bonuses at the same time would further compress liquidators' net compensation. Aave V3 Arbitrum | Asset | LTV | LT | LB (unchanged) | | --- | --- | --- | --- | | WETH | 80% → 81% | 84% (unchanged) | 5.00% | | WBTC | 73% → 78% | 78% → 82% | 7.00% | Aave V3 Base | Asset | LTV | LT | LB | | --- | --- | --- | --- | | WETH | 80% → 81% | 83% → 84% | 5.00% (unchanged) | | cbBTC | 73% → 81% | 78% → 84% | 7.50% → 6.00% | The lower cbBTC bonus is supported by the approximately $33M of stablecoin liquidity identified in the Base assessment. Aave V3 Base: cbBTC Stablecoins E-Mode | Category ID | Collateral | Borrowable assets | LTV | LT | LB (unchanged) | | --- | --- | --- | --- | --- | --- | | 10 | cbBTC | GHO, USDC | 80% → 82% | 83% → 85% | 4.00% | Aave V4 Ethereum Main Spoke | Asset | CF | Maximum LB (unchanged) | | --- | --- | --- | | WETH | 83% → 84% | 5.55% | | wstETH | 80% → 82% | 6.66% | | weETH | 80% → 81% | 7.77% | | WBTC | 78% → 85% | 5.55% | | cbBTC | 78% → 85% | 5.55% | Apply the V4 collateral factor changes by updating the existing dynamic configuration, rather than deploying a new collateral configuration. Next Steps If this ARFC Snapshot passes, submit the specified changes for implementation through an Aave Improvement Proposal (AIP). Disclaimer Prepared independently by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk has no direct affiliation with the protocols assessed and received no compensation from them or their affiliates for this work. This material is not legal, financial, tax, or professional advice.

Summary This ARFC seeks community feedback on deploying Aave V4 on Base and activating an initial tokenized equities market. Base is an Ethereum Layer 2 incubated by Coinbase, with low transaction costs, native USDC liquidity, and access to a broad retail user base. Aave has operated on Base since 2023, and the network was among Aave's first multi-chain deployments to surpass $1 billion in deposits. The deployment would bring the Hub and Spoke architecture to one of Aave's largest existing deployments. It would establish a dedicated Equities Hub, separating liquidity and risk for the tokenized equities market from other Aave markets on Base, while providing a foundation for specialized markets as the network develops. Motivation Base combines an established Aave deployment, growing stablecoin activity, and an expanding set of consumer applications, payments products, and trading venues. These conditions support demand for onchain credit infrastructure that can serve distinct use cases while maintaining clearly defined liquidity and risk boundaries. Deploying Aave V4 on Base would: Upgrade one of Aave's largest existing deployments to the current protocol architecture. Establish a dedicated market for tokenized equities, with USDC as the borrowable asset and tokenized equities used exclusively as collateral at launch. Separate the liquidity and risk of this market from other Aave markets on Base through a dedicated Equities Hub. Extend Aave's presence within the Base and Coinbase ecosystem as additional users, applications, and tokenized assets come onchain. The initial market provides a focused implementation of the V4 architecture. A single pooled spoke will support the initial set of tokenized equities as collateral, allowing users to borrow USDC against diversified positions while maintaining asset-specific collateral factors. The equities themselves will not be borrowable at launch. Coinbase's distribution, infrastructure, and institutional relationships may support a broader range of tokenized assets on Base over time. A dedicated V4 market provides a measured starting point for this activity, with a market structure designed to accommodate distinct collateral types and risk profiles without extending their exposure to other Aave markets. Market Structure The tokenized equities market is deployed through a dedicated Equities Hub on Base. USDC suppliers to the hub explicitly opt into lending against tokenized equity collateral, and this exposure is isolated from other Aave markets. The Hub contains a single USDC reserve and two spokes. The Mag-7 Spoke supports USDC borrowing against the seven specified tokenized equities. The Tokenized USDC Spoke is supply only, providing vaults and aggregators with a composable USDC position without collateral exposure. Within the Mag-7 Spoke, users may supply any combination of the seven tokenized equities as collateral and borrow USDC. Each asset retains its own collateral factor, so borrowing capacity remains determined by the composition of each position. Pooling the assets within one spoke allows diversified collateral positions to be managed within a single market. The tokenized equities are collateral only at launch. Borrowing of equities, and positions that borrow one equity against another, are not enabled. Specification Dynamic Liquidation Bonus Configuration | Chain | Hub | Spoke | Liquidation Bonus Factor | Target Health Factor | Health Factor For Max Bonus | |-------|-----|-------|-------------------------:|---------------------:|----------------------------:| | Base | Equities Hub | Mag-7 Spoke | 90.00% | 1.24 | 0.90 | Spoke Parameters The liquidation fee is 10%, consistent with the rest of Aave V4. The risk premium threshold is 0 for every reserve, as risk premiums are not in use, and liquidators can receive collateral as shares on every reserve. | Chain | Hub | Spoke | Reserve | Collateral Factor | Max Liquidation Bonus | Borrowable | Collateral Risk | Liquidation Fee | Risk Premium Threshold | Receive Shares | |-------|-----|-------|---------|------------------:|----------------------:|------------|----------------:|----------------:|-----------------------:|----------------| | Base | Equities Hub | Mag-7 Spoke | AAPLc | 78.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | AMZNc | 73.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | GOOGLc | 76.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | METAc | 65.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | MSFTc | 79.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | NVDAc | 70.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | TSLAc | 65.00% | 5.50% | FALSE | 0 | 10.00% | 0 | TRUE | | Base | Equities Hub | Mag-7 Spoke | USDC | 0.00% | - | TRUE | - | - | 0 | TRUE | Add and Draw Caps | Chain | Hub | Spoke | Reserve | Add Cap | Draw Cap | |-------|-----|-------|---------|--------:|---------:| | Base | Equities Hub | Mag-7 Spoke | AAPLc | 15,000 | 0 | | Base | Equities Hub | Mag-7 Spoke | AMZNc | 10,500 | 0 | | Base | Equities Hub | Mag-7 Spoke | GOOGLc | 15,000 | 0 | | Base | Equities Hub | Mag-7 Spoke | METAc | 5,800 | 0 | | Base | Equities Hub | Mag-7 Spoke | MSFTc | 5,200 | 0 | | Base | Equities Hub | Mag-7 Spoke | NVDAc | 24,000 | 0 | | Base | Equities Hub | Mag-7 Spoke | TSLAc | 14,000 | 0 | | Base | Equities Hub | Mag-7 Spoke | USDC | 32,000,000 | 21,000,000 | | Base | Equities Hub | Tokenized USDC Spoke | USDC | 1,000,000 | 0 | Interest Rate Curve | Chain | Hub | Asset | Base Drawn Rate | Rate Growth Before Optimal | Rate Growth After Optimal | Optimal Usage Ratio | Liquidity Fee | |-------|-----|-------|----------------:|---------------------------:|--------------------------:|--------------------:|--------------:| | Base | Equities Hub | USDC | 0.00% | 4.00% | 20.00% | 90.00% | 10.00% | Price Feeds Each reserve is priced by the Chainlink total return feed for the token, which carries the issuer multiplier and follows the 24/5 US equities market hours. These are standard feeds. Smart Value Recapture variants are not used at rollout. USDC is priced by the Chainlink USDC/USD feed on Base through the stable price cap adapter, with the cap set at 1.04. | Reserve | Token | Chainlink feed | |---------|-------|----------------| | AAPLc | 0xb200000000000000000000C2e324d24d7eEcd1fb | 0x787f13dEa48Db0897CbCDD985de77809D837F988 | | AMZNc | 0xb200000000000000000000d9192b6B456483C2E8 | 0x06A8E4b3aBB3B7543d8396FB2B763d22820cB295 | | GOOGLc | 0xb2000000000000000000002D0BA3164cc74f58B7 | 0x5bF49E0ffA937CE2FfF033c739aD7C634c4D34F2 | | METAc | 0xb2000000000000000000008bC8786B856E61707C | 0x6526aE6797A76123638b863AeE4dD27Ba4E4b27D | | MSFTc | 0xB200000000000000000000Ab99cFa739E253872B | 0xeB10A6c9aa7E537aEd766C08c35Dae35B321b18c | | NVDAc | 0xB20000000000000000000078ee7ce2fE4908108C | 0x04689a41629776563E6822F76f2e57D148d28513 | | TSLAc | 0xb2000000000000000000001e800a7f5189430cD0 | 0xFaf869185383a24F8cb00e27BdA6b63B9905DCb4 | | USDC | 0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913 | 0x7e860098F58bBFC8648a4311b374B1D669a2bc6B, with the stable price cap adapter at 1.04 | Useful Links Base website Base developer documentation Aave V4 overview Disclosures Aave Labs is the author of this proposal and has received no compensation from third parties for its creation. Copyright Copyright and related rights waived via CC0.

Title: [ARFC] Activate Aave Risk Stewards on Aave V4 Author: Aave Labs Date: 2026-09-02 Summary This proposal seeks to activate the Aave Risk Steward on the Aave V4 Ethereum and Aave V4 Avalanche instances. If adopted, it would grant the Risk Steward bounded, revocable delegated authority to adjust a defined set of Hub, Spoke, and Oracle risk parameters within fixed cooldowns and a maximum change allowed per update. To keep that authority narrow, each instance's two configurator domain admin roles would first be split into five granular roles apiece, so the Risk Steward would receive only the risk management and emergency capabilities it needs. The Risk Steward contracts proposed for this activation are undergoing audit by Certora, with the engagement now reaching finalization. Motivation Today, adjusting any Hub, Spoke, or Oracle parameter, from interest rate curve tuning to collateral risk updates, requires a full governance cycle through the domain admin role on each instance's configurator, even when the change would fall within a range the DAO has already discussed. The Aave Risk Steward pattern already reduces this governance overhead on Aave V3 through the Aave Generalized Risk Stewards, where Risk Service Providers update parameters within bounds and cooldowns set by governance instead of returning to a vote for every adjustment. This proposal would extend the same pattern to Aave V4, activating the Aave Risk Stewards on the Ethereum and Avalanche instances with the bounds proposed below for Hub, Spoke, and Oracle parameters. Specification Configurator role split The proposed scope of each new role is as follows. | Concern | Hub role | Spoke role | Scope | |----|----|----|----| | Prevent all activity | HUBCONFIGURATORSPOKEACTIVEROLE (201) | SPOKECONFIGURATORPAUSE_ROLE (401) | Flips the flag that prevents all activity, in both directions. updateSpokeActive on the Hub, updatePaused on the Spoke. | | Prevent new activity | HUBCONFIGURATORSPOKEHALTEDROLE (202) | SPOKECONFIGURATORFREEZE_ROLE (402) | Flips the flag that prevents new activity, in both directions. updateSpokeHalted on the Hub, updateFrozen on the Spoke. | | Listing | HUBCONFIGURATORLISTINGROLE (203) | SPOKECONFIGURATORLISTINGROLE (403) | addAsset, addAssetWithDecimals, addSpoke, addSpokeToAssets on the Hub. addReserve, updateBorrowable, updateReceiveSharesEnabled on the Spoke. | | Emergency | HUBCONFIGURATOREMERGENCYROLE (204) | SPOKECONFIGURATOREMERGENCYROLE (404) | The batch flag actions that only ever move toward a safer state. deactivateAsset, haltAsset, deactivateSpoke, haltSpoke on the Hub. pauseReserve, pauseAllReserves, freezeReserve, freezeAllReserves on the Spoke. | | Risk management | HUBCONFIGURATORRISKMANAGEMENTROLE (205) | SPOKECONFIGURATORRISKMANAGEMENTROLE (405) | updateSpokeAddCap, updateSpokeDrawCap, updateSpokeCaps, updateSpokeRiskPremiumThreshold, updateInterestRateData on the Hub. updateCollateralRisk, addCollateralFactor, updateCollateralFactor, addMaxLiquidationBonus, updateMaxLiquidationBonus, addLiquidationFee, updateLiquidationFee, addDynamicReserveConfig, updateDynamicReserveConfig, updateLiquidationTargetHealthFactor, updateHealthFactorForMaxBonus, updateLiquidationBonusFactor, updateLiquidationConfig on the Spoke. | | Residual domain admin | HUBCONFIGURATORDOMAINADMINROLE (200) | SPOKECONFIGURATORDOMAINADMINROLE (400) | updateLiquidityFee, updateFeeReceiver, updateFeeConfig, updateInterestRateStrategy, updateReinvestmentController, resetAssetCaps, resetSpokeCaps on the Hub. updateReservePriceSource, updatePositionManager on the Spoke. | The two flag roles would be named after the flag they own rather than after pause and freeze, because the Hub carries no paused or frozen flag of its own. Its equivalent state is the Spoke active flag, tracked per asset, which gates every Hub action, and the halted flag, which gates the actions that instantly update liquidity. The emergency role is proposed as separate from both because every one of its selectors only ever moves a target to a safer state and can never move it back, so it could be delegated to an entity that can act faster than the two flag roles, which move state in either direction. The Hub's batch cap resets are proposed to stay with the domain admin role: zeroing caps moves in only one direction, the same as a halt, but only risk management could restore them, so restoring capped values would remain a governance action. Role IDs and selector sets would match Roles.sol in the Aave V4 repository, following the convention of appending new IDs while the domain admin role's selector set shrinks. Existing IDs would never be repurposed, so the two domain admin roles would retain the selectors that fall outside the five new roles, and every address holding a domain admin role today would be granted the corresponding five new roles, preserving its current reach. Risk Steward parameter bounds For each parameter, the cooldown would set the minimum time between successive Risk Steward updates, the maximum change per update would cap how far a single update can move the parameter, and the mode would determine whether that maximum applies as an absolute change or one relative to the parameter's current value. The same bounds are proposed for both the Aave V4 Ethereum and Aave V4 Avalanche instances. | Scope | Parameter | Cooldown | Max change per update | Mode | |----|----|----|----|----| | Hub | optimalUsageRatio | 36 hours | 3% | absolute | | Hub | baseDrawnRate | 36 hours | 3% | absolute | | Hub | rateGrowthBeforeOptimal | 36 hours | 3% | absolute | | Hub | rateGrowthAfterOptimal | 36 hours | 20% | absolute | | Hub | addCap | 36 hours | 100% | relative | | Hub | drawCap | 36 hours | 100% | relative | | Spoke | collateralRisk | 36 hours | 300% | absolute | | Spoke | collateralFactor (update) | 72 hours | 0.5% | absolute | | Spoke | maxLiquidationBonus (update) | 72 hours | 0.5% | absolute | | Spoke | collateralFactor (addition) | 72 hours | 5% | absolute | | Spoke | maxLiquidationBonus (addition) | 72 hours | 0.5% | absolute | | Spoke | targetHealthFactor | 72 hours | 5% | relative | | Spoke | healthFactorForMaxBonus | 72 hours | 5% | relative | | Spoke | liquidationBonusFactor | 72 hours | 5% | absolute | | Oracle | priceCapLst | 72 hours | 5% | relative | | Oracle | priceCapStable | 72 hours | 0.5% | relative | | Oracle | discountRatePendle | 48 hours | 0.025 | absolute | Risk Steward grants It is proposed that each Risk Steward be granted four of the new roles on its instance's AccessManager, with no execution delay: HUBCONFIGURATORRISKMANAGEMENTROLE, HUBCONFIGURATOREMERGENCYROLE, SPOKECONFIGURATORRISKMANAGEMENTROLE, and SPOKECONFIGURATOREMERGENCYROLE. The two risk management roles are what the bounds above would require: without them the Risk Steward could not reach either configurator. The two emergency roles are proposed alongside so that a future Risk Steward release could respond to an emergency without a further governance cycle; the release proposed here calls none of their selectors, so they would remain inert until then. It is further proposed that each Risk Steward be granted RISK_ADMIN on its instance's Aave V3 ACLManager, needed for the priceCapLst, priceCapStable, and discountRatePendle bounds above to take effect through the shared CAPO adapters. Disclaimer Aave Labs is presenting this proposal as a contributor to the Aave ecosystem. Aave Labs is putting forward this proposal as part of its ongoing work on the Aave Protocol's risk management infrastructure and has no undisclosed financial interest in its outcome. Next Steps 1. Gather community feedback during the ARFC stage. 2. If the ARFC response is positive, escalate to Snapshot for off-chain confirmation. 3. Following a positive Snapshot outcome, execute the corresponding payloads through the V4 Security Council to activate the Risk Steward on the Aave V4 Ethereum and Aave V4 Avalanche instances. Copyright Copyright and related rights waived via CC0. *

Title: [ARFC] Deploy Aave V4 on Arc Author: Aave Labs Date: 2026-09-02 Summary This ARFC proposes deploying Aave Protocol V4 on Arc Network. Motivation Aave Labs proposes deploying Aave V4 on Arc, the institutional-grade public layer-1 blockchain built by Circle, at or near Arc mainnet launch. The initial deployment would activate with one Liquidity Hub and two Spokes, supporting an initial set of high-quality assets: USDC, EURC, WETH and cirBTC. Relative to the Temp Check, which proposed an initial scope of USDC, EURC and cirBTC, this ARFC adds WETH as a fourth launch asset in response to demand signals from prospective liquidity providers and to strengthen day-one borrow markets. Following the Temp Check, this ARFC sets out the proposed initial token listing and parameters. Deploying on Arc provides several benefits: Positions Aave as a core lending protocol at launch. Increases market access for Circle-issued assets. Expands Aave’s reach into institutional liquidity flows. Generates additional protocol TVL and revenue. Arc’s infrastructure is designed to concentrate stablecoin and tokenized asset liquidity, making it a logical fit for Aave. Following the passing of the TEMP CHECK Snapshot, this ARFC sets out the proposed launch topology, asset scope, oracle configuration, incentive structure, and rollout path. Rollout The rollout will follow a deliberately conservative, phased path. The deployment would launch at or near Arc mainnet with conservative caps, followed by monitored expansion and cap increases per LlamaRisk recommendations as live conditions support. Additional assets, including further RWA assets, could be onboarded through subsequent governance processes. Incentive and Revenue Structure In connection with the deployment, Aave DAO is expected to receive a minimum of $2m per year in protocol revenue from the Aave V4 deployment on Arc, with any shortfalls covered by certain Arc ecosystem participants for the first five years following deployment. This structure provides protection for Aave DAO during the bootstrap phase. Specification Market Design The launch configuration consists of one hub and two spokes. The Core Hub serves as the sole borrowing environment, structured around two spokes targeting a distinct collateral type, user intent, and risk profile: Main Spoke: The Main Spoke is the general-purpose lending venue and is expected to host the majority of liquidity within the deployment. It accepts the broadest collateral set and the broadest borrowable set in the deployment, where USDC, cirBTC, and wETH are collateral against which users can borrow USDC, EURC, cirBTC, and wETH. In the future, the Main Spoke can provide credit lines to specialized Hubs, allowing them to access its liquidity while preserving separate risk profiles. Forex Spoke: It supports trading and hedging across fiat-pegged stablecoins, with EURC and USDC as collateral, which can be borrowed against each other. Due to limited secondary market liquidity for EURC, conservative caps have been set. In addition to the two spokes above, a tokenized spoke layer will also be created, which is a supply-only integration layer that tokenizes deposits of the Core Hub's borrowable assets (USDC, EURC, cirBTC, and wETH) into composable positions for external vaults, aggregators, and strategies, without enabling borrowing or introducing additional collateral risk to the Core Hub. Dynamic Liquidation Bonus Configuration V4 replaces V3's static liquidation bonus with a dynamic bonus that scales with the health factor. Each spoke is configured through three parameters: the Target Health Factor (the HF a borrower is restored to after liquidation), the Health Factor For Max Bonus (the HF at which the maximum bonus is reached), and the Liquidation Bonus Factor (which scales the curve so the bonus at an HF of 1.0 matches the corresponding V3 value). The Forex Spoke uses correlated-asset settings, and the Main Spoke applies a wider curve suited to volatile collateral. | Chain | Hub | Spoke | Liquidation Bonus Factor | Target Health Factor | Health Factor For Max Bonus | |-------|-----|-------|--------------------------|----------------------|-----------------------------| | Arc | Core Hub | Main Spoke | 90.00% | 1.2400 | 0.90 | | Arc | Core Hub | Forex Spoke | 100.00% | 1.0442 | 0.99 | V4 Spoke Parameters The liquidation protocol fee is to be set at 10% across all assets, aligning with the configuration used for the majority of assets on Aave V3. | Chain | Hub | Spoke | Reserve | Collateral Factor | Max Liquidation Bonus | Borrowable | Collateral Risk | Liquidation Fee | |-------|-----|-------|---------|-------------------|-----------------------|------------|-----------------|-----------------| | Arc | Core Hub | Main Spoke | cirBTC | 78.00% | 7.22% | TRUE | 0 | 10.00% | | Arc | Core Hub | Main Spoke | USDC | 78.00% | 5.55% | TRUE | 0 | 10.00% | | Arc | Core Hub | Main Spoke | wETH | 83.00% | 5.55% | TRUE | 0 | 10.00% | | Arc | Core Hub | Main Spoke | EURC | 0.00% | - | TRUE | - | - | | Arc | Core Hub | Forex Spoke | EURC | 90.00% | 2.00% | TRUE | 0 | 10.00% | | Arc | Core Hub | Forex Spoke | USDC | 90.00% | 2.00% | TRUE | 0 | 10.00% | Add and Draw Caps The Add Cap and Draw Cap values below are preliminary. They are set conservatively ahead of liquidity being deployed on-chain, where secondary-market depth is not yet established, and reflect the hub-and-spoke structure of Aave V4 and the distinct risk profiles of each spoke. These values may be refined once liquidity is deployed and market conditions become observable on-chain. For USDC and EURC, the cumulative Add Cap is distributed across the Main and Forex Spokes. Add Cap and Draw Cap are denominated in token units. | Chain | Hub | Spoke | Reserve | Add Cap | Draw Cap | |-------|-----|-------|---------|---------|----------| | Arc | Core Hub | Main Spoke | cirBTC | 1,100 | 220 | | Arc | Core Hub | Main Spoke | USDC | 56,000,000 | 51,000,000 | | Arc | Core Hub | Main Spoke | wETH | 24,000 | 4,800 | | Arc | Core Hub | Main Spoke | EURC | 20,000,000 | 18,000,000 | | Arc | Core Hub | Forex Spoke | EURC | 10,000,000 | 9,000,000 | | Arc | Core Hub | Forex Spoke | USDC | 13,000,000 | 11,000,000 | | Arc | Core Hub | Core Tokenized USDC Spoke | USDC | 10,000,000 | 0 | | Arc | Core Hub | Core Tokenized EURC Spoke | EURC | 9,000,000 | 0 | | Arc | Core Hub | Core Tokenized cirBTC Spoke | cirBTC | 160 | 0 | | Arc | Core Hub | Core Tokenized wETH Spoke | wETH | 6,000 | 0 | Tokenized Spokes serve as the standard entry point for integrators, vaults, aggregators, and other strategies routing liquidity into Aave V4 markets. They are supply-only and accept deposits exclusively in each hub's primary borrowable assets, ensuring a simple, composable tokenized representation. Interest Rate Curves The IRM parameters apply to an asset across all spokes within that hub. The parameters follow the same two-slope utilization curve used in V3, defined by a base variable borrow rate, slope below the optimal usage ratio (Slope 1), slope above it (Slope 2), and the optimal usage ratio itself (Uoptimal). The Liquidity Fee is the fraction of borrower interest captured by the protocol treasury, equivalent to the reserve factor in V3. The goal of the initial configuration is to keep the setup as similar as possible to the one currently used in Aave V3. | Chain | Hub | Reserve | Base | Slope 1 | Slope 2 | Uoptimal | Liquidity Fee | |-------|-----|---------|------|---------|---------|----------|---------------| | Arc | Core Hub | USDC | 0.00% | 4.10% | 10.00% | 90.00% | 10.00% | | Arc | Core Hub | EURC | 0.00% | 5.50% | 50.00% | 90.00% | 10.00% | | Arc | Core Hub | cirBTC | 0.25% | 4.00% | 60.00% | 80.00% | 20.00% | | Arc | Core Hub | wETH | 0.00% | 2.20% | 8.00% | 90.00% | 15.00% | Oracle Configuration Oracle assignments for V4 Arc deployment replicate the existing V3 and V4 configurations, applying the Capped USDC/USD and EURC/USD feeds with an upside cap of 1.04 to price the respective stablecoins, ETH/USD feed for wETH, and the BTC/USD feed for cirBTC. Next Steps 1. Gather community feedback and risk analysis from LlamaRisk 2. Escalate the proposal to the ARFC Snapshot stage. 3. If the ARFC Snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Disclaimer Aave Labs is not compensated by Arc, nor affiliated with them. Copyright Copyright and related rights waived via CC0. *