Aave Governance

[TEMP CHECK] Onboard xSolvBTC to Aave V3 BOB Instance Date: 2025-06-23 Author: Solv Protocol & ACI --- Summary This proposal seeks to onboard xSolvBTC to Aave V3 BOB Instance, once it's live, if [[ARFC] Deploy Aave v3 on BOB ](https://governance.aave.com/t/arfc-deploy-aave-v3-on-bob/20544) eventually pass and is live. Motivation xSolvBTC is a yield-bearing Bitcoin token representing staked Bitcoin in the Babylon ecosystem, recently rebranded from SolvBTC.BBN; Pegged 1:1 with Bitcoin, it enables users to earn staking rewards from Babylon while unlocking liquidity and additional yields in the DeFi ecosystem. Since launching in July 2024, more than 10,000 xSolvBTC have been minted. Now xSolvBTC is redeemable for SolvBTC at a 1:1 ratio(0.2% redemption fee will be charged for now). Somehow we expect to see xSolvBTC minting & redemption automated at the smart contract level in the next few weeks, which means SolvBTC and xSolvBTC can be converted to each other in one block without any fees except the gas cost. In this case, xSolvBTC will be sharing all the DEX liquidity of SolvBTC. Benefits to onboarding xSolvBTC Integrating xSolvBTC as collateral on AAVE v3 on BOB Pool will offer several benefits: 1. Enhanced Liquidity: xSolvBTC will significantly enhance liquidity and trading volumes on AAVE, fueled by the diverse yield opportunities within the xSolvBTC ecosystem — including Solv RP, DeFi yield strategies, and points farming across leading Layer 2 networks. 2. Increased Yield Opportunities: With AAVE v3 on BOB supporting xSolvBTC as collateral, users can unlock greater capital efficiency by leveraging their xSolvBTC holdings. This integration drives higher potential returns from lending and borrowing activities, particularly for WBTC and SolvBTC. 3. Innovative DeFi Strategies: The integration paves the way for the development of advanced DeFi strategies involving WBTC, SolvBTC, and xSolvBTC. This is expected to spur increased demand for supplying and borrowing across these assets, enriching the AAVE ecosystem. 4. Solv Points Incentives: To mark the launch, users can earn Solv RP with a 6x multiplier by lending xSolvBTC — the highest multiplier ever offered — during an exclusive one-month boosting campaign. Solv Points System Portal: https://app.solv.finance/points DEFI Page: https://app.solv.finance/defi These benefits are aligned with similar successful integrations on other lending protocols in the DeFi space, where xSolvBTC has enabled users to enhance their yield opportunities and drive higher protocol fees. Integrating xSolvBTC into AAVE v3 on BOB represents a strategic opportunity for both platforms. This partnership will enhance liquidity, attract new users, and drive innovative DeFi strategies within the BOB Chain ecosystem. By combining robust liquidity with AAVE’s lending capabilities, we can foster significant growth and reinforce our leadership in the DeFi and BTC-Fi sectors. Specification Risk Parameters will be provided at ARFC stage by Risk Service Providers. Asset Overview Token Name: xSolvBTC Token Symbol: xSolvBTC Contract Address on BOB: 0xcc0966d8418d412c599a6421b760a847eb169a8c Chainlink Oracle: details incoming Useful links POR: https://data.chain.link/feeds/ethereum/mainnet/xsolvbtc-por Audits: https://github.com/solv-finance/Audit Official Website: https://app.solv.finance/xsolvbtc Documentation: https://docs.solv.finance/ Github: https://github.com/solv-finance Disclaimer ACI (Aave Chan Initiative) is not directly affiliated with Solv Protocol or BOB Foundation and did not receive compensation related to this proposal. Next Steps 1. Publication of this TEMP CHECK and escalation to TEMP CHECK Snapshot. 2. If 1 pass, publish an ARFC to continue gathering community and Service Providers feedback and escalate to ARFC Snapshot. 3. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived under CC0.

[TEMP CHECK] Onboard SolvBTC to Aave V3 BOB Instance Date: 2025-06-23 Author: Solv Protocol & ACI --- Summary This proposal seeks to onboard SolvBTC to Aave V3 BOB Instance, once it's live, if [[ARFC] Deploy Aave v3 on BOB ](https://governance.aave.com/t/arfc-deploy-aave-v3-on-bob/20544) eventually pass and is live. Motivation Solv Protocol is the on-chain Bitcoin Reserve, bridging TradFi, CeFi, and DeFi to unlock the full potential of over $1 trillion in Bitcoin. Through SolvBTC and SolvBTC.LSTs (Liquid Staking Tokens), Solv enables both retail and institutional investors to generate returns on their Bitcoin, turning it from an idle asset into a yield-generating instrument that seamlessly integrates with the broader financial ecosystem, driving the next era of Bitcoin Finance. Solv Protocol is backed by prominent investors such as Binance Labs, Blockchain Capital, Laser Digital, OKX Ventures, and others. Solv Protocol has undergone extensive security audits by leading firms, including Quantstamp, Certik, SlowMist, Salus, and Secbit. About SolvBTC SolvBTC, is a token representation of Bitcoin kept in Solv’s Bitcoin Reserves(the Initial Reserves includes BTCB & native BTC only), where it allows Bitcoin liquidity to seamlessly flow across various chains, breaking down inter-chain barriers and providing crucial liquidity infrastructure for the entire Bitcoin-powered finance (BTCFi) ecosystem. Deployed on more than ten networks like Bitcoin mainnet, Ethereum mainnet, BNB Chain, Berachain, AVAX and BOB, SolvBTC is a key liquidity provider with over 20,000 BTC kept in its reserves. Our robust liquidity has attracted many key players in the DeFi world to partner and build using SolvBTC. Among them include Bitcoin Staking protocol Babylon, Synthetic Dollar Stablecoin Protocol Ethena, Jupiter on Solana, GMX on Arbitrum and many other projects. Benefits to onboarding SolvBTC Integrating SolvBTC as collateral on AAVE V3 on BOB will offer several benefits: 1. Enhanced Liquidity SolvBTC will boost liquidity and trading volumes, due to the various yield opportunities built upon the SolvBTC ecosystem, including Solv RP, DeFi yields 2. Increased Yield Opportunities: With AAVE v3 on BOB supporting SolvBTC as collateral, users can leverage their SolvBTC holdings to maximize returns from AAVE’s lending and borrowing features, driving higher returns for WBTC lending. 3. Innovative DeFi Strategies: Support from AAVE v3 on BOB will foster the development of new DeFi strategies for WBTC and SolvBTC, increasing demand for both supplying and borrowing WBTC. Similar cases can already be seen on lending protocols of other L2s, where users lend their xSolvBTC (LST built on top of SolvBTC), to borrow more SolvBTC, and looping for more yields. This resulted in higher protocol fees for those lending protocols due to higher borrowing rates. 4. Solv Points Incentives: To mark the launch, users can earn Solv RP with a 6x multiplier by lending xSolvBTC — the highest multiplier ever offered — during an exclusive one-month boosting campaign. Solv Points System Portal: https://app.solv.finance/points DEFI Page: https://app.solv.finance/defi These benefits are aligned with similar successful integrations on other lending protocols in the DeFi space, where SolvBTC has enabled users to enhance their yield opportunities and drive higher protocol fees. Integrating SolvBTC into AAVE V3 on BOB represents a strategic opportunity for Solv, AAVE and BOB Chain. This partnership will enhance liquidity, attract new users, and drive innovative DeFi strategies within the BOB Chain ecosystem. By combining SolvBTC’s robust liquidity with AAVE’s lending capabilities, we can foster significant growth and reinforce our leadership in the DeFi and BTC-Fi sectors. Specification Risk Parameters will be provided at ARFC stage by Risk Service Providers. Asset Overview Token Name: SolvBTC Token Symbol: SolvBTC Contract Address on BOB: 0x541fd749419ca806a8bc7da8ac23d346f2df8b77 Chainlink Oracle: details incoming Useful links POR: https://data.chain.link/feeds/bsc/mainnet/solv-por Audits: https://github.com/solv-finance/Audit Official Website: https://app.solv.finance/solvbtc Documentation: https://docs.solv.finance/ Github: https://github.com/solv-finance Disclaimer ACI (Aave Chan Initiative) is not directly affiliated with Solv Protocol or BOB Foundation and did not receive compensation related to this proposal. Next Steps 1. Publication of this TEMP CHECK and escalation to TEMP CHECK Snapshot. 2. If 1 pass, publish an ARFC to continue gathering community and Service Providers feedback and escalate to ARFC Snapshot. 3. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived under CC0.

[TEMP CHECK] Onboard openUSDT to Aave V3 BOB Instance Date: 2025-06-23 Author: ACI --- Summary This proposal seeks to onboard openUSDT to the Aave V3 BOB Instance, once it's live, if [[ARFC] Deploy Aave v3 on BOB ](https://governance.aave.com/t/arfc-deploy-aave-v3-on-bob/20544) eventually pass and is live. Motivation OpenUSDT (oUSDT) is a new interoperable bridged USDT standard purpose-built for cross-chain DeFi. It is fully backed 1:1 with native USDT and enables efficient inflows of stablecoin liquidity into the BOB ecosystem. Benefits to onboarding openUSDT Enhanced Capital Efficiency: Onboarding oUSDT deepens stablecoin liquidity, increasing efficiency for lending, and borrowing strategies. Improved User Experience: AAVE users on BOB gain access to a trusted, liquid stablecoin for collateral or loan positions, with familiar risk properties (1:1 backed by USDT). Stimulates Borrow Demand: Listing oUSDT increases the supply of a reliable borrowing asset, enabling more diverse and stable borrowing markets. Specification Risk Parameters will be provided at ARFC stage by Risk Service Providers. Asset Overview Token Name: OpenUSDT Token Symbol: oUSDT Contract Address on BOB: 0x1217BfE6c773EEC6cc4A38b5Dc45B92292B6E189 Chainlink Oracle: Address will be provided upon launch of Chainlink Data Feeds on BOB. Useful links Audits: https://docs.openusdt.xyz/audit Official Website: https://www.openusdt.xyz/ Documentation: https://docs.openusdt.xyz/ Disclaimer ACI (Aave Chan Initiative) is not directly affiliated with BOB Foundation and did not receive compensation related to this proposal. Next Steps 1. Publication of this TEMP CHECK and escalation to TEMP CHECK Snapshot. 2. If 1 pass, publish an ARFC to continue gathering community and Service Providers feedback and escalate to ARFC Snapshot. 3. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived under CC0.

---- title: [ARFC] Update Signers and SAFE Configuration author: @TokenLogic created: 2025-06-24 ---- Summary This publication proposes updating the signer configurations on several operational SAFE wallets to improve execution robustness and overall efficiency. Motivation As the Aave ecosystem continues to grow, operational efficiency across SAFE-managed assets and working groups is becoming increasingly important. Several current configurations have shown signs of friction due to limited signer coverage, time zone dispersion, and increased workload demands. The value of assets held across each SAFE is shown on the TokenLogic Treasury Dashboard, within the sub-account section: https://aave.tokenlogic.xyz/treasury To improve execution reliability and security of funds held across a variety of SAFEs, this publication proposes the following: Consolidating signers to reflect Aave Finance Committee (AFC) across SAFEs that hold DAO assets * Each approved budget has a designated SAFE for easy tracking and reporting * Introduce Zodiac roles that enable a separate SAFE to receive a spending allowance equivalent to approx. 2 weeks working capital * Add 2nd signer from the primary responsible team to provide a level of redundancy * Transfer of funds requires signers from at least two different Service Providers Assigning voting rights to SAFEs with lower signer count to support operational efficiency * 1 signer for off-chain votes, votes can be over-written * 2 signers for on-chain votes, votes require one review Where practical, a Proposer Role is assigned to individuals enabling transactions to be submitted for review and approval by various team members. The following SAFE signer and permission updates are proposed: APE SAFE Transfer Assets to a new SAFE Address with AFC composition Delegate voting rights back to the original APE SAFE 3 of 7 signers requirement is maintained Add Emile from TokenLogic, add Chris from ALC and remove kpk from existing SAFE that becomes the Voting SAFE with 2 of 5 signer requirement. Assets SAFE (3 of 4): 0xAA43203167317DeeF8288095C44b84a686918d2E Voting SAFE (2 of 5): 0xa9e777D56C0Ad861f6a03967E080e767ad8D39b6 Aave Liquidity Committee (ALC) SAFE Delegate voting rights (vlAURA and sdCRV) to the ALC Voting SAFE with 1 of 4 Signer requirement. This SAFE does not hold any assets and all votes are on Snapshot, therefore can be overwritten if required. Create an ALC Incentive SAFE with an Allowance from the ALC Main SAFE sufficient to support 1-2 weeks operational expenses with 2 of 4 signers requirement. Update ALC SAFE to have the same signer composition as the AFC, changing from 3 of 5 to 3 of 4 signer requirement. Add Emile from TokenLogic and Figue from Trevee to ALC Voting and ALC Incentive SAFEs. Figue was a signer on the ALC Main SAFE. ALC SAFE (3 of 4):0xA1c93D2687f7014Aaf588c764E3Ce80aF016229b ALC Voting SAFE (1 of 4):0xAA484Ba6a7f51f00A3f82a11e73b741AE1dEAB58 ALC Incentive SAFE (2 of 4):0xAAB6f926DCDaE536F54ce58478Dbc1a0d0f98871 Ahab & Merit SAFE Assign Ahab and Merit budgets to different SAFEs. By holding a longer duration of funding, increasing from 3 months to up to 6 months, the value of assets held on the SAFE increases and supports a higher signer requirement. A separate proposal is being prepared that extends/repurposes the Ahab budget as part of a broader Aave growth effort. Separating the Merit and Ahab budgets supports easier tracking and monitoring of funding allocations. Update Merit SAFE and create a new Ahab SAFE to have the same signer composition as the AFC, changing from 2 of 3 to 3 of 4 signer requirement. Merit SAFE (3 of 4): 0xdeadD8aB03075b7FBA81864202a2f59EE25B312b Merit Incentive SAFE (3 of 5): 0xAA870e4B82deaDa3727235f34183Ec9B728714C8 Ahab SAFE (3 of 4): 0xAA2461f0f0A3dE5fEAF3273eAe16DEF861cf594e Frontier SAFE Update Frontier SAFE to have the same signer composition as the AFC, changing from 2 of 3 to 3 of 4 signer requirement. Frontier SAFE (3 of 4): 0xCDb4fA6ba08bF1FB7Aa9fDf6002E78EDc431a642 Aave Finance Committee (AFC) Allocate the CEX Earn Program funding to a second AFC SAFE with the same signer count 3 of 4 to streamline budget management and maintaining analytics dashboards Create a CEX Incentive SAFE that is funded periodically to support weekly operational expenses with 3 of 5 signers requirement. The Incentive SAFE is expected to hold 1-2 weeks of budget and streamline operations with the introduction of an additional signer. Add Emile from TokenLogic to AFC CEX Incentive SAFE as a signer. AFC SAFE (3 of 4):0x22740deBa78d5a0c24C58C740e3715ec29de1bFa AFC CEX Earn SAFE (3 of 4): 0xAA12BAd4a501d45A5b771e49C2Fd415BA8BFc79d AFC CEX Incentive SAFE (3 of 5):0xAAd742dd9111373ec3C1E53b005e870d4CfF3be2 In recognising @Figue's continuous support to the ALC, this publication proposes a 2k GHO per month retainer. The unbiased and insightful value Figue provides enhances the ALC decision making capability. Furthermore, Figue is one of the most dependable signers and this funding, to be paid from the ALC budget, recognises Figue's ongoing support to the Aave DAO. Specification The below provides a visual of the the various SAFEs and their respective Signer configuration. !TokenLogic SAFE presentation Do note, the Proposer Roles are subject to change and are not shown on the image above. Further information relating to Zodiac roles using Spending Limits can be found here. Each signer's address and each SAFE address can be found within the Aave Address Book by @bgdLabs, https://search.onaave.com/. The 2k GHO monthly retainer for @Figue shall be paid from the start of July 2025 from the existing ALC budget. In addition, the Gho Steward SAFE shall be updated to match the AFC composition. The broader Risk Steward role is to remain unchanged. Next Steps 1. Gather feedback from the community. 2. If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage. 3. If Snapshot outcome is YAE, TokenLogic shall implement this proposal. Disclaimer TokenLogic does not receive any payment for this proposal. Copyright Copyright and related rights waived via CC0.

[ARFC-Addendum] Update Merit for Round 18 Author: ACI (Aave Chan Initiative) Date: 2025-06-27 --- Simple Summary This addendum proposes updates to the Boosters and reward structure for Merit Round 18. These changes are designed to reflect current market dynamics and improve the effectiveness of the Merit program. Motivation With Merit Round 17 concluding on June 30, this update ensures Merit Round 18 is aligned with current ecosystem conditions and incentives. The removal of outdated Boosters and the introduction of more relevant participants (e.g., DeFi Saver and Den users) aim to streamline alignment. Switching reward distribution from GHO to sGHO, along with moving to a weekly cadence, improves capital efficiency and encourages continued participation. The reasoning is because monthly generation was no longer relevant as there is no longer any cooldown on sGHO. Specification Boosters Update The following changes will be applied: Remove the Diluters Remove the Migrator Booster Remove SAFE users from “Second degree aligned” Booster Keep DeFi Saver and add Den users to the “Second Degree Aligned” Booster Reward Update Rewards will be now distributed in sGHO instead of GHO ⇒ easily auto-compound interest and direct distribution because there is no cooldown. Rewards will be now distributed weekly instead of monthly ⇒ the budget will be now 250k per week. The total annual budget will be at 13M per year (1M more than previous budget, due to calculations to adjust to 52 weeks in a year rather than 48). Next Steps 1. Escalate this [ARFC-Addendum] proposal to a Snapshot vote for formal approval. 2. If [ARFC Addendum] is approved in the Snapshot phase, the proposal will be canon and changes will be applied to Merit Round 18. Disclaimer The Aave Chan Initiative independently proposes “Merit” without external compensation. Copyright Copyright and related rights waived under Creative Commons Zero (CC0).

Title: [ARFC] stS Loop Incentive Program author: @TokenLogic created: 2025-06-16 Summary This ARFC proposes the launch of a 3-month stS loop incentive program on Aave. The goal is to deepen stS liquidity on Aave, align incentives with Beets, and ensure Aave remains the exclusive lending market for stS. Motivation Beets has committed to Aave as the exclusive home for stS liquidity and will not incentivize or market any external stS lending market. This commitment aligns with the broader “Just Use Aave” strategy and presents a strong opportunity to consolidate stS liquidity on Aave v3. To support this integration and unlock meaningful TVL, this ARFC outlines a clear path forward to bootstrap stS<>wS loop participation via: Cashback incentives based on stS collector revenue. Clarity around exclusivity boundaries regarding Beets’ Boosted Pools. Incentive Program Structure Phase 1: 3 months 100% of stS collector revenue will be recycled to users participating in the stS<>wS loop. A fixed budget of 40,000 wS will be allocated for cashback distribution, for the first month. The budget will be managed via the dedicated MASiv SAFE, funded directly by the Aave Collector upon approval. Phase 2: Months 4 to 6 50% of Aave's stS collector revenue will be recycled to users continuing to engage with the loop. Rewards will be distributed on a weekly basis, proportional to looped positions and verified through on-chain criteria. Exclusivity Clarification stS Lending: Aave will remain the exclusive lending market for stS. Beets has committed not to support stS lending on any external markets for the duration of the program. Beets Boosted Pools: Exclusivity applies only to stS. Beets will continue to operate and incentivize Boosted Pools for other assets not listed on Aave, including long-tail or non-collateral markets. Any future exclusivity for Boosted Pools would be subject to separate governance and agreement. Specification Collector Allowance An allowance from the Aave Collector will be requested to fund the 40,000 wS budget via a single transaction to the designated MASiv Nested SAFE. The initial Allowance is for 40,000 wS from Sonic instance. Asset: aSonwS 0x18eFE565A5373f430e2F809b97De30335B3ad96A Amount: 40,000 Spender: Masiv nested safe0x565B80842eCEDad88A2564Ea375CE875Ed3bAdeC Method: approve() aSonwS on the Aave Collector contract to the Masiv address. Next Steps 1. Gather feedback from the community. 2. If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage. 3. If Snapshot outcome is YAE, an AIP will implement this proposal. Disclaimer TokenLogic does not receive any payment for this proposal. Copyright Copyright and related rights waived via CC0. ---

[TEMP CHECK] Onboard USD1 to Aave V3 Core and BNB Instance Author: World Liberty Finance (WLFI) Date: 2025-06-14 Summary World Liberty Financial (WLFI) proposes the listing of USD1, a fiat-backed stablecoin issued by WLFI, on Aave V3 Core and BNB Instances. This listing would initially enable users to deposit USD1 to earn yield and borrow USD1 as a stable asset. Collateral usage will be considered at a later date following review by Aave’s Risk Management teams. Motivation USD1 is a next-generation stablecoin backed 1:1 by cash and short-term U.S. Treasuries,designed for maximum regulatory compliance, transparency, and on-chain verifiability. As the fastest-growing stablecoin in history, USD1 has rapidly gained adoption across centralized and decentralized platforms, demonstrating strong market demand and growing utility. Key differentiators: 1. Regulatory compliance: USD1 is structured to meet stringent U.S. financial regulations and disclosure standards. 2. Chainlink Proof of Reserves: USD1 will be the first stablecoin to implement Chainlink’s PoR natively, providing real-time transparency of backing assets. 3. Chainlink price feed: Live and available for use in Aave integrations. Specification Risk Parameters will be provided by Risk Service Providers and proposal will be updated accordingly. USD1 Overview: Ticker: USD1 Fiat backed stablecoin Issuer: World Liberty Financial (WLFI) Backing assets: USD cash and short-term U.S treasuries. Audits: PeckShield Price Oracle: Chainlink USD1 Listed on: Binance, ByBit, KuCoin, BitGet, MEXC, HTX. Use Cases: 1. Deposits enabled for yield generation 2. Borrowing enabled as a low-volatility asset Incentives: WLFI plans to provide incentives to grow adoption and improve the competitiveness of borrowing rates for USD1 relative to other stablecoin assets on Aave. Specific programs will be shared with Aave DAO contributors and the community in ARFC stage. Disclosure The current proposal has been powered by Skywards. ACI is not afiliated with WLFI and has not received compensation for the creation and edit of this proposal. Next Steps 1. Publication of TEMP CHECK to gather community & service providers feedback, and escalate to TEMP CHECK Snapshot. 2. Publication of a standard ARFC, if TEMP CHECK Snapshot passed, to continue collecting community & service providers feedback before escalating proposal to ARFC snapshot stage. 3. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived via CC0

[TEMP CHECK] Onboard syrupUSDC to Aave V3 Core Instance Author: ACI Date: 2025-06-18 --- Summary This proposal seeks to onboard syrupUSDC — a USDC-based yield-bearing token issued by Maple Finance — as a collateral asset on Aave V3 Core Instance. syrupUSDC is built on top of Maple's infrastructure and offers access to overcollateralized, fixed-rate institutional loans, providing high and consistent yields to DeFi users. Maple, launched in 2021, is an on-chain Asset Manager with decades of traditional finance and crypto experience. As of June 2025, Maple has $2.3b in AUM. Maple combines deep capital markets expertise with DeFi innovation to offer digital asset lending and yield products. Motivation Onboarding syrupUSDC to Aave V3 Core Instance provides: New Token Type: A new collateral option backed by real yield from fixed-rate institutional lending strategies AAVE TVL: Maple has a large network of institutional capital allocators, ready to allocate $500M+ USDC/USDT into syrupUSDC if it is available on Aave as collateral to loop it and get to their hurdle rates. Higher Rates and Utilization: Increases USDC rates and utilization due to strong expected borrower demand. Growth Incentives: Maple has $250k of incentives available to bootstrap the growth for Aave users. The Aave and Maple partnership will enable: New Yield Opportunities: Commercial alignment with Maple's large institutional network, unlocking additional yield generation opportunities for Aave. GHO Adoption: Maple can help with growing other strategic priorities for Aave, including GHO adoption. Eg GHO lending to institutions. Future Collaboration: Future asset listings, including the Maple liquid yielding Bitcoin asset. Specification Ticker: syrupUSC Yield bearing token. It's a USDC based, yield bearing token whose principal and yield are backed by the secured lending strategy of Maple. (More details below). Technical details: ERC-4626 token standard built on top of the Maple's smart contracts. High Yield. Maple has a track record of generating consistent high underlying yield of 7-15% net APY. Loans are fully collateralised by digital assets ensuring lending positions are protected, even if borrowers default or asset prices fall. More on: https://app.maple.finance/earn. Risk Parameters will be provided by Risk Services Providers at the earliest possible on ARFC stage and ARFC will be updated with that feedback. Useful links: Website: https://maple.finance/ App: https://app.maple.finance/earn/details Disclosure ACI (Aave Chan Initiative) is not affiliated with Maple Finance and has not received compensation for creating this proposal. Next Steps 1. If consensus is reached on this [TEMP CHECK], escalate this proposal to the Snapshot stage. 2. If the Snapshot outcome is YAE, this proposal will be escalated to ARFC stage. 3. Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage. 4. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived via CC0.

Summary To maximize the impact of GHO’s upcoming listings on Bybit, Bitget, and other centralized exchanges (CEXs), this publication proposes engaging a market maker to provide spot liquidity and allocating funds to a CEX Earn program to drive broader adoption of GHO. Motivation Listing GHO on centralized exchanges serves as a strategic lever to broaden its adoption by tapping into a wider and more diverse user base. It opens a powerful new distribution channel, allowing the Aave DAO to strengthen GHO’s market presence and accelerate its global reach. Expanded Audience: Access to retail and institutional users who primarily operate on CEXs and are less familiar with decentralized and on-chain stablecoins. New Utility: Enables GHO to be used as collateral in perpetual contracts and other financial products not currently available within DeFi. Enhanced Liquidity and Visibility: CEX listings improve global accessibility and strengthen GHO’s brand recognition through higher trading volumes and broader market exposure. While several stablecoins are already entrenched on centralized platforms, GHO's success will hinge on delivering a compelling value proposition that differentiates it from more established alternatives. By leveraging the Aave Protocol as a native yield engine, GHO can replicate the successful strategies of stablecoins like USDtb and USDe, channeling yield from the GSMs directly to CEX users, incentivizing them to hold and use GHO. Earn Campaign Structure To accelerate GHO’s adoption, we propose a user acquisition incentive that rewards users for simply holding GHO on the CEX—regardless of how or where it's used on the platform. This mechanism mirrors the experience of depositing into an on-chain Earn vault, allowing users to earn yield passively while maintaining full flexibility. By offering native yield on CEX-held GHO, we aim to drive broader usage across the exchange’s ecosystem—spanning spot, derivatives, and Earn products—while positioning GHO as a competitive and attractive alternative to existing stablecoins. The GHO Earn Campaign offers the following features: sGHO-style Airdrop Model: A proxy system that tracks GHO balances on participating CEXs and rewards users on a weekly basis, mimicking the on-chain sGHO model. Incentives Distribution: Rewards will be distributed based on GHO balances held in eligible accounts on partner exchanges. Users will receive a weekly airdrop direct to their balance to create a savings account user experience. This model encourages sustained holding of GHO while aligning with familiar incentive mechanisms used in CEX environments. By offering a competitive yield that accelerates GHO's broad adoption, we are able to advocate for further integrations beyond Spot trading and Earn Platforms. Through offering greater utility such as Margin trading and Perpertuals, we expect to achieve higher retention rates when rewards are reduced. Market Maker TokenLogic is working with Market Makers to provide Spot trading liquidity across various CEXs. Each potential partner was recommended by multiple CEXs and upon a thorough review, a select few have been short listed to those with a proven track record for providing stablecoin Spot market liquidity. TokenLogic will continue to work with various Market Makers to source and provide liquidity. With a preference for Market Makers that provide their own inventory, the Aave DAO is likely to provide working capital to sustain the CEX. A combination of trading firms and Market Makers will likely be engaged in varying capacity with the goal to ensure peg stability and sufficient liquidity enabling broader integration across the CEX platforms. Objectives Listing GHO on centralized exchanges expands its reach to a broader user base and creates a new distribution channel, enabling the Aave DAO to accelerate adoption and increase market presence. The goal of this initiative is to deliver the following objectives over a 4 to 6 month period: $150 million new GHO supply; GHO Spot trading pairs; Earn platform integration; Margin trading; and, Collateral status for multi-asset perpetual trading; @TokenLogic will engage a Market Maker to provide Spot liquidity sufficient to enable GHO to be included as collateral on Multi-asset perpetual positions. For reference USDtb was able to acheive such status within a few weeks of listing on ByBit. Revenue With USDT/GHO Spot trading liquidity enabling users to swap USDT for GHO, the USDT will be received and used to Mint GHO via the stataUSDT GSM. This USDT is then deposited into Aave v3 where it will earn the deposit rate and provide the DAO with additional revenue. The Aave DAO generates revenue via the deposit rate on Aave Protocol plus the Reserve Factor. However, to amplify the adoption of GHO, the Earn program is to provide a yield exceeding the Aave deposit rate to attract meaningful growth in line with the objectives mentioned above. Therefore the program is expected to incur a cost during the bootstrapping phase which will be recovered during the later phases as it transitions into a sustainable integration. Funding The Earn program's yield is expected to exceed the Aave Protocol deposit rate and be competitive compared to other offerings in the market. In administering the program, GHO holders will received GHO airdrop to them each week. Users receive a fixed yield that is adjusted on a weekly cadence to be loosely correlated with the broader market. ie: Week 1 could 6% and Week 2 6.25%. However, to limit budget exposure there is a TVL target, once exceeded the yield is diluted to avoid over spend. Whilst Aave generates revenue from the GSMs and in parallel distributes GHO to CEX users, there are both timing considerations and difference in yield to consider. By creating a separate budget, this streamlines the operational burden for sustaining the program. Revenue generated by the GSMs will accumulate independent of the rewards being distributed. The true cost of the program is the difference between revenue generated from the new GHO circulating supply and the rewards distributed to bootstrap GHO across the CEXs. TokenLogic will provide a dashboard to track overall spend and revenue generated from activities linked to this program. Specification To execute this initiative, we are requesting a funding allocation of 5M GHO from the DAO treasury to be used for: Weekly reward distribution (denominated in GHO or an equivalent stable asset). Technical integration and CEX collaboration costs. Marketing support to promote GHO onboarding and listings. Proposed budget: 5M GHO over 4 to 6 Month period The initial Allowance is for 5M GHO from Prime instance. Asset: aEthLidoGHO 0x18eFE565A5373f430e2F809b97De30335B3ad96A Amount: 5M Spender: AFC 0x22740deBa78d5a0c24C58C740e3715ec29de1bFa Method: approve() aEthLidoGHO on the Aave Collector contract to the AFC address. To facilitate the program, the following assets are to be swapped to GHO. | Ethereum | Amount | Swap | | :-------------: | :----: | :----: | | USDT | 2.50M | GHO | | USDC | 2.50M | GHO | Next Steps 1. Gather feedback from the community. 2. If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage. 3. If Snapshot outcome is YAE, an AIP will implement this proposal. Disclaimer TokenLogic does not receive any payment for this proposal. Copyright Copyright and related rights waived via CC0.

Summary Chaos Labs provides an addition to the PT Tokens/Stablecoin E-Modes in order to improve the user experience with regard to debt asset migration. Motivation The creation of a new E-Mode which allows users to leverage USDe-linked PT tokens against USDe itself has already proven a success, as USDe has generated a significant revenue relative to its size. !image (2).png Also beneficial, and as discussed in our previous post, leveraging these PT tokens against their underlying assets, rather than other stablecoins, reduces the risks inherent in these strategies, allowing for more permissive collateral parameters and creating less risk for the protocol. However, the current configuration leads to frictions for users who may wish to transfer their PT-token-backed debt from USDe to USDT or vice versa; allowing easier debt swapping benefits both the protocol, by creating more stable rates, and users, by granting access to the most competitive rates available. Currently, a user would be required to unwind their position on Aave, potentially including swapping on Pendle, introducing transaction and execution costs. As suggested by @myriad, it is preferable to instead add USDe to each PT-Tokens’ respective Stablecoin E-Mode. Please note that if a user is borrowing to the maximum LTV/LT in the USDe E-Mode, they will be required to reduce their leverage before performing the E-Mode migration. For example, a user borrowing at 92.5% LTV in the USDe E-Mode will be required to reduce their LTV to 92.1% or lower to comply with the parameters of the PT-USDe-July Stablecoin E-Mode, presented below. !image (1) (1).png As indicated in the subsequent chart, the advantage of migrating from USDe to Stablecoin debt is expected to persist only briefly, until the USDe E-Mode loan-to-value and liquidation-threshold parameters are raised to reflect the lower risk of a highly correlated collateral–debt pair. Hence, following this initial period, we expect the majority of the migration flow to be performed in the opposite direction. !image (2) (1).png Additionally, the APY projections shown assume utilisation reaches the kink. Demand for these leveraged strategies is highly rate-sensitive, and as such, their profitability will be reflected in utilisation metrics. To date, USDe-denominated E-Modes have consistently delivered higher profitability than the general Stablecoin E-Mode. !image (3).png Specification Add USDe as a borrow-only asset in the following E-Modes: PT-eUSDe Stablecoins August 2025 PT-USDe Stablecoins July 2025 Disclaimer Chaos Labs has not been compensated by any third party for publishing this recommendation. Copyright Copyright and related rights waived via CC0

Summary Chaos Labs proposes a 12-month early renewal of our risk management partnership with the Aave DAO, starting July 13, 2025. This renewal will be a new and separate engagement stream, operating in parallel with the current engagement, which remains active through November 12, 2025. The early renewal will not affect the existing engagement and will continue independently through July 12, 2026. This proposal reflects both the expanded scope of work already delivered—including support for new asset classes, implementation of systemic risk mechanisms, and over 1,100 risk parameter updates—and Chaos Labs’ continued commitment to building critical components of Aave’s risk infrastructure. Our top priority for the upcoming term is the deployment and scaling of the Edge Risk Oracle, which currently secures over $5B in deposits and dynamically manages supply caps, borrow caps, interest rate curves, and PT parameters. Significant functional expansions are underway to further automate and strengthen the protocol’s risk systems. We are seeking DAO alignment on this strategic direction and resource allocation to ensure the sustained delivery, scalability, and decentralization of Aave’s risk management infrastructure. Background & Context Chaos Labs was appointed by the Aave DAO in November 2022 as its dedicated risk partner and is currently operating under a 12-month engagement that began in November 2024. Since the start of this current term, Aave has experienced substantial growth—doubling its TVL from $12B to $24B and generating over $71.5M in protocol revenue. This rapid expansion has been accompanied by a surge in protocol complexity across assets, deployments, and mechanisms. Over this same period, Aave has integrated or prepared for several major system upgrades: onboarding of Principal Tokens (PTs); deployment of mechanisms such as Smart Value Recapture (SVR); and the upcoming launch of Umbrella, Aave’s insolvency protection layer. To meet these evolving needs, Chaos Labs has transitioned from periodic risk reviews to delivering deeply integrated, protocol-native risk automation infrastructure. At the core of this system is our Edge Risk Oracle architecture, which powers automated, governance-bounded updates to supply and borrow caps, interest rate curves, and Principal Token collateral parameters—actively securing over $5B in deposits across Aave markets. In parallel, we’ve expanded our real-time monitoring infrastructure, executed over 1,100 parameter updates via the Risk Stewards, and published targeted research on high-impact risk domains such as Ethereum validator staking penalties, Ethena-related risks, and SVR recapture dynamics. As Aave prepares to onboard 10+ additional deployments and expand its asset coverage further, the protocol’s resilience and capital efficiency will depend on the continued development of a modular, data-driven risk layer. This renewal enables Chaos Labs to maintain and scale that infrastructure in lockstep with Aave’s accelerating trajectory. Enhanced Scope and Value Delivery Highlights Despite renewing at flat commercials of $2M in November, Chaos Labs has significantly expanded its work's scope, volume, and impact compared to the prior year, delivering substantially more value without a budget increase. Over the past six months of the current engagement, Chaos Labs has provided both tactical execution and strategic risk support, surpassing last year’s outputs across all key metrics: 64 asset listing analyses completed in the past 7 months (vs. 46 in the entire previous year), reflecting a sharp increase in volume and diligence scope. 13 new deployment listings, with 10 scheduled to go live shortly, significantly expanding protocol reach and impact. 226 supply cap, 203 borrow cap, and 572 interest rate curve updates executed through the Risk Stewards, scaling operational coverage. 260 total forum posts spanning proposal authorship, parameter reviews, research, and real-time risk insights, reinforcing Chaos Labs’ governance leadership. !image - 2025-06-12T210246.737.png The quality and depth of asset listings have significantly evolved, centered on the fundamental characteristics of each asset and its interaction with Aave’s core mechanisms. Listings incorporate understanding how the asset functions within its native protocol, aligning risk parameters with issuer-specific designs such as redemption logic, staking mechanics, or rebase behavior at a technical level. These are paired with simulation-backed stress testing, modeling systemic interactions, market shocks, and protocol-specific failure modes to ensure resilient integration. For contrast: Earlier listing: oSETH onboarding Current standard: USR onboarding Edge Risk Oracle Infrastructure Chaos Labs has not only deployed a suite of Risk Oracles across the protocol—we have also designed the quantitative methodologies, triggers, and governance guardrails that underpin them. We are the only team in the industry offering end-to-end oracle-driven risk automation, combining bespoke modeling, real-time data integrations, and protocol-native controls. WETH Interest Rate Curve Oracle on the Prime Instance automatically adjusts Slope1 based on Lido staking rewards and the wstETH supply rate to preserve the profitability of looping strategies and optimize protocol revenues, accounting for $548M in deposits. ↳ https://governance.aave.com/t/arfc-aave-generalized-risk-stewards-agrs-activation/19178/3?u=chaoslabs Supply & Borrow Cap Oracles deployed across major V3 deployments (Avalanche, Arbitrum, Base), providing automated risk and utilization-aware cap adjustments for over $3.4B in total deposits. ↳ [[ARFC] Supply and Borrow Cap Risk Oracle Activation](https://governance.aave.com/t/arfc-supply-and-borrow-cap-risk-oracle-activation/20834?u=chaoslabs) Principal Token (PT) Risk Oracle for Pendle and similar assets—featuring quantitative parameterization and automated kill switch logic—now supporting over $1B in integrated PT assets. ↳ ARFC: PT Risk Oracle Stablecoin Interest Rate Curve Risk Oracle, approved via Snapshot, enabling dynamic interest rate optimization for stablecoin markets with improved efficiency. ↳ ARFC: Curve Oracle Monitoring & Analytics Monitoring infrastructure has been significantly expanded, now tracking advanced metrics such as asset collateral distribution over time, user LTV at liquidation, and market liquidity concentration. Over the past six months, support has been extended to 5 additional deployments, bringing the total to 16, with imminent support for upcoming deployments underway. ↳ Aave Risk Monitoring and Alerting Platform SVR Monitoring Platform, launched to monitor SVR metrics and liquidation outcomes at a granular level, alongside SVR oracle performance. ↳ SVR Dashboard !image - 2025-06-12T210253.793.png !image - 2025-06-12T210257.267.png Key Research Pieces Ethereum staking risk modeling, quantifying validator slashing impacts on LST/LRT performance and collateralization viability. ↳ Research Post Ethena-related risk simulations, including funding volatility, depeg risk, and potential contagion scenarios. ↳ Simulation Post SVR analysis, evaluating integration feasibility, revenue potential, and liquidation delay risks through detailed oracle delay and bad debt modeling. ↳ SVR Analysis Market Events Chaos Labs Risk Reports during market events such as 02/03/25 and 04/07/25, providing real-time analysis of liquidation volume, user behavior, and Aave protocol performance under heightened volatility. Chaos Labs post-mortem on the Bybit security event, highlighting how CEX-driven price dislocations impacted oracle feeds and outstanding risks in the context of USDe and Ethena, and underscoring the need for more resilient on-chain pricing mechanisms. ↳ Post-Mortem Scope Chaos Labs continuation of phased sUSD deprecation on Optimism, building on prior recommendations in response to structural changes in Synthetix and persistent peg instability. This latest adjustment further tightens risk parameters to responsibly minimize exposure as part of an ongoing wind-down strategy. ↳ ARFC Risk Oracle Infrastructure Chaos Labs will continue to expand Aave’s Edge Risk Oracle infrastructure to cover additional critical risk surfaces and enhance protocol automation. Building on our existing deployments, the following areas are targeted for upcoming integration: Expansion of Supply & Borrow Cap Oracles to all Aave V3 instances, ensuring consistent and utilization-optimized cap management across deployments. Deployment of Interest Rate Curve Oracles across stablecoin and high-volume collateral markets, enabling real-time dynamic pricing to optimize protocol welfare and maintain competitive market conditions. Ongoing Principal Token (PT) Risk Oracle coverage, ensuring that all new PT listings are automatically supported with live collateral parameter adjustments, while maintaining existing integrations. Automated Kill Switch Integration for LSTs, LRTs, Ethena-related, and other yield-bearing derivatives, disabling supply or borrow functionality under adverse events such as validator slashing, depegs, or liquidity collapse. Reserve Factor Risk Oracle, to dynamically optimize DAO revenue through automated reserve factor tuning, aligned with Umbrella’s framework and responsive to shifting market dynamics and liquidity flows. All updates will continue to be bound by governance-approved parameters and transparently tracked through public dashboards. This upcoming roadmap represents a significant step toward full-spectrum oracle-driven risk automation across the Aave ecosystem. SVR & Real-Time Monitoring Infrastructure Chaos Labs will continue to operate and enhance Aave’s real-time risk and monitoring infrastructure, which serves as the backbone of protocol-level visibility and operational responsiveness. We will expand monitoring dashboards to support all future deployments, incorporating detailed liquidation performance analytics across collateral types and borrower segments. This includes real-time tracking of oracle deviations, recapture efficiency, and execution quality, enabling the DAO to evaluate the effectiveness of MEV recapture and broader liquidation outcomes. Beyond SVR, our infrastructure will maintain wallet-level exposure analysis, surfacing risks related to position concentration, correlated collateral dependencies, and liquidation clustering potential. These insights will be paired with risk alerting systems, flagging real-time anomalies such as overutilized assets, depleted liquidity, or extreme funding dislocations. We will also continue to publish live Oracle performance logs and full update histories for all automated parameter changes, including caps, LTVs, interest rates, and more. This ensures ongoing transparency, accountability, and governance alignment across all Chaos-managed automation layers within the Aave protocol. Aave Umbrella: Deployment, Maintenance, Monitoring & Parameterization Chaos Labs is leading the risk management and parameter calibration efforts for Aave Umbrella, a native insolvency protection mechanism that introduces a tranche structure to absorb bad debt under stress scenarios. Umbrella will enhance Aave’s systemic resilience by enabling structured risk-sharing and coordinated protection across markets and deployments. During this engagement, we will focus on operationalizing Umbrella across active and upcoming deployments. This includes simulation-backed design of exposure caps, freeze conditions, and incentive structures tailored to the unique risk profile of each reserve. We will provide ongoing support and insights to the Aave Finance Committee in calibrating key parameters such as: maxEmissionPerYear, which reflects the incremental yield required to compensate users for staking into Umbrella. Its calibration will account for factors including foregone collateral utility, prevailing interest rate environments, cooldown risk, and systemic exposure. Target Liquidity, representing the optimal reserve coverage needed to mitigate tail risks, derived using a quantitative Value-at-Risk (VaR) framework. This ensures efficient sizing of Umbrella participation across volatile and composable markets. To support transparency and community alignment, we are also launching a dedicated Umbrella Dashboard, providing real-time analytics and visualizations on reserve coverage, parameterization status, and system-wide protection metrics. Umbrella will serve as a key component of Aave’s systemic risk architecture, offering structured insolvency protection and capital efficiency across an increasingly complex multi-deployment environment. Asset Listings & Adaptive Risk Management As Aave continues to expand across new networks, asset types, and market structures, the protocol requires a more agile, simulation-driven risk framework capable of responding to a constantly evolving landscape. Chaos Labs will continue to lead risk onboarding and configuration for new assets and deployments, adapting to novel pricing mechanisms and composable integrations as they emerge. Rather than relying solely on fixed parameter templates, our approach is dynamic and context-specific. We evaluate each asset and market instance on its own terms, factoring in liquidity, volatility, composability, and systemic impact. As Aave’s complexity increases, we ensure that risk management scales accordingly, applying both proactive simulations and real-time monitoring to inform governance-aligned recommendations. All adjustments are implemented through the Risk Steward framework, enabling timely and bounded execution. Each action is paired with transparent rationale and tradeoff analysis, ensuring the community remains informed and aligned as the protocol grows in depth and reach. GHO Risk Management Chaos Labs will continue managing GHO risk through parameter tuning, peg monitoring, and facilitator oversight. With the launch of sGHO and the Aave Savings Rate (ASR), we are developing a comprehensive quantitative model to optimize ASR parameters—AMP, Premium, and Index Rate—ensuring yields remain competitive, sustainable, and resistant to arbitrage. We will benchmark sGHO against comparable stablecoins, monitor user behavior, and propose adjustments as needed. All insights will be surfaced via our GHO Risk Dashboard, covering peg health, ASR dynamics, and facilitator activity in real time. In parallel, we will maintain and expand monitoring of the GHO peg across centralized and decentralized exchanges, analyzing liquidity, volume, and spread behavior under various market conditions. We will continue onboarding support for new GHO facilitators, offering simulations and stress-testing of credit allocation models, collateral design, and associated systemic risk. Incident Response & DAO Support As Aave’s risk partner, Chaos Labs will remain on call to respond to major market events or protocol-level disruptions. These events may include oracle failures or feed manipulation, validator slashing incidents that impact collateral values, asset-specific volatility (e.g., USDe or stETH depegs), and coordinated liquidation events during systemic stress. With the ongoing integration of the Edge Risk Oracle infrastructure, many of these scenarios can now be proactively addressed through automated parameter adjustments and killswitch logic, reducing manual intervention and minimizing the risk of cascading failures. Our incident response protocol includes rapid modeling of potential impact, simulation of mitigation paths, coordination with DAO stakeholders and Guardians, and publication of real-time risk updates with proposed governance actions. We will also produce post-incident reports that evaluate event triggers, parameter effectiveness, and potential upgrades to future protections. Our role as an embedded operational risk steward ensures that Aave can respond with speed, confidence, and clarity when it matters most. Community Engagement & Governance Chaos Labs will: Publish monthly updates summarizing progress, simulations, Oracle activity, and dashboard enhancements, which can be observed in this thread. Remain active on the Aave Governance Forum with posts, feedback, and proposal authorship Maintain weekly syncs with delegates and contributors Share dashboards, documentation, and analysis artifacts for community insight Early Renewal Commercial Terms To ensure continuity and align long-term commitments, we propose executing an early renewal agreement, effective July 13, 2025, with a 12-month term running through July 12, 2026. This renewal will run concurrently with the existing contract until November 12, 2025, after which it will continue as the sole active agreement through its conclusion on July 12, 2026. This proposal reflects both the expanded scope of work already delivered—including support for new asset classes, implementation of systemic risk mechanisms, and over 1,100 risk parameter updates—and Chaos Labs’ continued commitment to building critical components of Aave’s risk infrastructure. Early Renewal Summary: Renewal Term: July 13, 2025 – July 12, 2026 Duration: 12 Months Annual Contract Value: $3,000,000 USD - 85% - $2,550,000 USD in aEthLidoGHO - 15% - $450,000 USD in AAVE - AAVE price (and corresponding amount of tokens allocated to Chaos) will be determined using a 30-day time-weighted average price (TWAP) based on CoinGecko pricing at the time of Snapshot conclusion. Payment Method: Streamed linearly via createStream() using IAaveEcosystemReserveController Recipient Address: 0xbC540e0729B732fb14afA240aA5A047aE9ba7dF0 (Chaos Labs multisig) Conflict Disclosures Chaos Labs provides risk services to other DeFi protocols (e.g., Benqi, Gearbox, Venus). We maintain strict operational firewalls, protocol-dedicated resources, and offer full transparency on shared asset exposure and methodology overlaps. Terms and Conditions This engagement will be governed by the Chaos Labs standard terms and conditions as seen here: https://chaoslabs.xyz/standardtermsandconditions Updates June 17, 2024: The above proposal was edited to reflect the compensation structure discussed in the comments below

[TEMP CHECK] Add XAUt to Aave V3 Core Instance Author: ACI Date: 2025-05-28 --- Summary The proposal aims to onboard Tether’s XAUt gold-denominated stablecoin, to the Aave v3 protocol Main Instance on Ethereum. Motivation XAUt is a gold backed digital currency offered by Tether. XAUt represents a unique opportunity to bring gold-backed assets into DeFi lending markets. Adding XAUt to Aave v3 would: 1. Diversify the protocol's offerings with a historically stable store of value 2. Enable users to use gold-backed tokens as collateral or for lending, creating new DeFi use cases 3. Allow users a hedge against market volatility through exposure to physical gold 4. Attract traditional finance users who are familiar with gold as an asset class The addition of XAUt aligns with Aave's goal of expanding DeFi accessibility while maintaining strong risk management practices through the use of established, well-backed assets. Specification Ticker: XAUt Contract address: Risk Parameters will be provided by Risk Services Providers at the earliest possible and ARFC will be updated with that feedback. Disclosure ACI (Aave Chan Initiative) is not afiliated with Tether and has not received compensation for creating this proposal. Next Steps 1. If consensus is reached on this [TEMP CHECK], escalate this proposal to the Snapshot stage. 2. If the Snapshot outcome is YAE, this proposal will be escalated to ARFC stage. 3. Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage. 4. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright

Summary Aave Labs is pleased to announce an event grant proposal for 2025. This proposal includes participation in key ecosystem initiatives at EthCC Cannes and Devconnect (Location TBD), among others. Last year, facilitated by the 2024 Grant, we were able to create Open Finance Day and DeFi Renaissance Day which were hugely successful in its two editions in Brussels and Bangkok. For 2025, we have decided to select two main events in the calendar in order to continue producing strategic high quality and impactful initiatives. Goals: present Aave Protocol’s latest innovations, help facilitate and open doors to new institutional and technological partnerships and cross-chain expansion, continue cementing Aave’s brand awareness as market leaders, help expand the DeFi Ecosystem alongside DAO friends and partners, bring together Aave DAO Service Providers. Background Aave Protocol has consistently been at the forefront of DeFi innovation with pioneering features. With a strong emphasis on security, usability, and composability, Aave has amassed a vibrant and engaged community of developers, users, contributors, and stakeholders. Aave has been the indisputable market leader for years, and institutions and fellow blockchain partners recognize this. Aave is and should continue to lead the DeFi sector towards its consolidation, especially in this new year, where they have been experiencing the highest wave of adoption, paired with a much friendlier attitude towards crypto coming from governments and institutions. Aave Protocol and its DAO are already the stewards of DeFi. Through hosting our own educational and networking events (DeFi Renaissance Day) and the powerful rAAVE as the main recreational event on the conference circuits, Aave Labs helps reinforce the hard work and milestones achieved by the DAO. Overview Aave Labs is requesting a grant for $750,000 paid in GHO for events in 2025: 1. DeFi Summer Day at EthCC and Devconnect: we are looking to continue this event series. The events started in Brussels as Open Finance Day, and continued in Bangkok under its current name. Both events were extremely successful, among the most popular events in the respective calendars. We brought together the most prominent voices in DeFi to discuss the topics of the moment, in high production settings. This allowed us to leverage complementary external networks, credibility, and resources for the event. The events served as a display of the strength and the proficiency of the Aave Protocol brand. The DeFi Day events are financed in collaboration with a selected group of aligned partners, that help as well in bringing awareness, expanding audience and elevating the brand value of the series. Some of the previous sponsors were: ZKSync, Chainlink, Sky, Lido, Uniswap, Scroll, Centrifuge, and Ethena Labs. 2. Merch: Aave Labs seeks to create highly coveted Aave and GHO branded merchandise to distribute at events, as part of community engagement and awareness-building efforts as well as to proliferate the ghost. Aave Labs will continue to push for the use of sustainable materials and creation of merch people actually wear, use, and love. 3. rAAVE: To celebrate the community’s welcoming culture, we plan to host two more editions of the flagship rAAVE event. Throughout the past years rAAVE has positioned itself to be the most sought after event in the ecosystem. They foster community spirit and create memorable experiences. We will integrate the GHO Pass for ticketing logistics and manage press relations and social media to maximize awareness and inclusion. This year’s events will be hosted at EthCC in Cannes and Devconnect (Location TBD). Notably last year we successfully mitigated costs for the DAO by sourcing sponsors (Aptos and Chainlink) for rAAVE Bangkok, and the model proved successful, so we’ll be following this strategy in 2025. 4. Side events currently being considered for small sponsorships and activations include: Aave v4 developer meetups and a hackathon, small self-hosted networking events and dinners during Berlin Blockchain Week, Token 2049 Singapore, Korea Blockchain Week, RWA Summit series, Stable Summit series and Chainlink SmartCon. Funds from any side events that are not confirmed will be rolled over to the next potential side event. The majority of the grant will be used to create an impactful presence during Devconnect and EthCC. DevConnect week will be the marquee event of the year. After covering the aforementioned main sponsorships, any remaining budget will be directed towards side events related to the security of DeFi and smart contract technology. Any excess funds from this grant will be rolled over to be used for events during Q1 2026. We’re pleased to confirm that the 2024 events strategy, which included careful budget allocation and partnering with top tier projects to co-finance the events, has resulted in $160,000 unspent funds that are being carried over towards the 2025 events.The proposed budget is in line with previous spending for similar events and covers all events of 2025. A recap on last year’s events was posted to governance last February, here. Aave Labs shall cover all travel expenses for its team members, and this proposal does not request any funds for these expenses, or include any compensation for Aave Labs’ work. Next Steps Get community feedback on ARFC Snapshot vote If Snapshot is successful, then move to AIP Conclusion We believe that the proposed one-off budget allocation of $750,000 paid in GHO for activations and events for 2025 will not only help enrich the Aave Protocol ecosystem, but will foster innovation, brand expansion and recognition.

[TEMP CHECK] Adopt The SEAL Safe Harbor Agreement Authors: @samczsun, Skylock, bgdlabs.eth Date: 2025-05-20 --- Summary This proposal outlines Aave Governance’s adoption of the SEAL (Security Alliance) Whitehat Safe Harbor Agreement (“Safe Harbor Agreement”). By adopting Safe Harbor, Aave improves the security of its on-chain assets by allowing whitehats to intervene during active exploits to save protocol funds. Safe Harbor provides legal protection and capped incentives for rapid, structured rescue of assets. Motivation The Safe Harbor Agreement addresses a critical need in crypto: enabling whitehats to step in when traditional responsible-disclosure procedures are too slow to prevent fund loss. Aave is committed to enhancing its security and protecting user funds during critical moments. While audits and preventive measures are vital, active exploits demand a swift, decisive response mechanism. Benefits of adopting Safe Harbor: Agile Defense Against Exploits: Whitehats may intervene as soon as an active exploit is detected, providing a rapid response mechanism that complements Aave’s ability to pause pools. In cases where pausing is not fast enough to prevent fund loss, whitehat intervention can reduce damage and accelerate asset recovery. Clarified Rescue Process: A predetermined recovery workflow ensures whitehats know exactly where to send rescued funds, preventing chaotic negotiations and enabling efficient, decisive action. Clear Financial Boundaries: A capped bounty (matching Aave’s existing bug-bounty maximum) aligns incentives, eliminates post-exploit reward disputes, and keeps intervention focused on fund recovery rather than negotiating payouts. Industry-Standard Alignment: Adoption of Safe Harbor aligns Aave with leading protocol-security practices, reinforcing its proactive stance on asset protection. Specification Upon passing this TEMP CHECK, Aave Governance will proceed to the ARFC stage, where the following parameters will be fully defined and finalized for inclusion in the AIP and on-chain registration: Agreement Registration: The Safe Harbor Agreement will be registered on-chain by calling the Safe Harbor Registry at 0x8f72fcf695523a6fc7dd97eafdd7a083c386b7b6 on Ethereum with the appropriate adoptionDetails payload. Parameters to be Defined During ARFC: - Asset Recovery Addresses: Specific Aave-controlled addresses for recovered-fund deposits. - Scope: The full list of smart contracts to be covered under Safe Harbor (covering major systems such as Aave v2, Aave v3, GHO, etc). - Security Contact: Designated contact details for coordination during incidents. - Bounty Terms: - Percentage of recovered funds - USD-denominated cap - Whether bounties are retainable from recovered funds - Identity Requirements: Whitehat anonymity and KYC provisions - Diligence Requirements: Any additional conditions for eligibility or compliance These elements will be specified in detail during the ARFC stage and proposed as part of the corresponding AIP. Implementation Plan 1. On-chain Registration: The finalized registerSafeHarbor(...) transaction will be executed via the AIP. 2. Community Communication: Official announcement across Aave communication channels to educate users. 3. Future Scope Updates: Additional systems or contract versions will be added via subsequent governance votes. Disclaimer The authors are not presenting this TEMP CHECK on behalf of any third party and are not compensated for creating it. Next Steps 1. Engage with the community and core security team to refine the detailed proposal. 2. Escalate to a TEMP CHECK Snapshot after community discussion. 3. If the Snapshot outcome is YAE, advance to the ARFC stage with detailed contract lists and adoption parameters. Copyright Copyright and related rights waived via CC0.

Simply summary Proposal for the Aave governance to approve to initial activation of the Aave Umbrella system, focusing on Aave v3 Core Ethereum before expanding to other pools and networks. --- --- Motivation Aave Umbrella is a replacement for the Aave Safety Module acting as a decentralised staking & coverage by slashing mechanism for potential losses in Aave pools. With Umbrella, instead of staking AAVE, ABPT (Balancer AAVE/wstETH LP), users will use Aave aTokens (aUSDC, aUSDT, etc) of each pool while keeping GHO, given these are the most efficient assets for coverage. --- --- Specification For full context it is highly recommended that voters visit and read the associated Aave governance forum post, but in summary, the proposal will do the following: Activating all Umbrella core and peripheral systems to start staking of assets to cover the biggest Aave v3 pool: v3 Core Ethereum. Do some changes on the legacy Safety Module instances, to start a progressive deprecation of it. --- Umbrella side The initial assets on Umbrella (v3 Core Ethereum) and their configurations will be the following. | Staked asset | Covered asset | Target Liquidity | Max emission (rewards at target liquidity) | Umbrella APY range (up until excess liquidity) | Total APY (Aave + Umbrella) | Cooldown/unstake window | Deficit offset | | --- | --- | --- | --- | --- | --- | --- | --- | | aUSDC (wrapped) | USDC | 66’000’000 USDC | 2’330’000 aUSDC/year | 1.76%-7.06% | 6.8%-12.5% | 20/2 days | 100’000 aUSDC | | aUSDT (wrapped) | USDT | 104’000’000 USDT | 3’670’000 aUSDT/year | 1.76%-7.06% | 6.8%-12.5% | 20/2 days | 100’000 aUSDt | | aWETH (wrapped) | WETH | 25’000 ETH | 550 aWETH/year | 1.1%-4.4% | 3%-6.3% | 20/2 days | 50 aWETH | | GHO | GHO | 12’000’000 GHO | 1’200’000 aGHO/year | 5%-20% | 5%-20% | 20/2 days | 100’000 GHO | *Target Liquidity is denominated in the contracts in wrapped aTokens, increasing over time in exchange rate. That means the Target Liquidity itself will grow slightly over time. For the sake of simplicity, the number on the table is in equivalent terms of underlying (USDC, USDT, WETH), not in wrapped aTokens Umbrella has an upper limit of APY as max emission is capped, but technically no lower limit. However, going over the table’s lower point of APY would mean there are way more deposits than expected, hence the market pricing “cheaper” the risk of staking. 1y average supply rates for each asset on Aave are taken as reference --- Additionally, the following aspects are important on highlight in the Umbrella side: Set as Rewards Admin the Aave Finance Committee, with a timelock of 1 day. This will be done by introducing a new Permissioned Payloads Controller, mirroring the architecture of the execution layer of the Aave Governance, but oriented to less critical flows like rewards updates. Set the Aave Ethereum Collector as the reward payer: the address from which rewards will be distributed. The configured allowance will be 50% of the defined yearly budget, which will allow enough but controlled flexibility for the Finance Committee to increase rewards during the initial month. At any point, the Aave governance can modify this as required. All outstanding deficits on assets to be covered by the initial Stake tokens will be “cleaned” with Collector funds on the AIP. The current aggregated deficit is up to ~$600 in USDC, USDT, WETH, and GHO, we don't expect these numbers to grow meaningfully before AIP. A DeficitOffsetClinicSteward smart contract will be given an allowance from the Aave Collector up to the Deficit Offset configured for each asset. This will allow the Aave Finance Committee to trigger deficit offset coverage without going through a governance proposal. The Deficit Offsets proposed are substantially above the bad debt levels historically accrued on Aave v3 Core on the covered assets. That means said offsets act as a very substantial “tranche” that should protect stakers from slashing under normal conditions. Stake Umbrella tokens, as by design, will cover exclusively the deficit created on the associated borrowed assets on Aave v3 Core Ethereum: Staked aUSDC will cover exclusively the deficit on USDC, staked GHO exclusively the deficit on GHO, and so on. A transfer of $249'000 will be done to BGD Labs, to cover the incurred audit cost of all Umbrella's smart contracts by StErMi, MixBytes and Ackee. --- Legacy Safety Module side The new configurations for the legacy Safety Module will be the following. | Staked asset | Rewards/day (AAVE) | Rewards/year (AAVE) | Rewards/year ($) | Average total staked ($) | Slashing eligibility | Total Slashable ($) | Swap effectivity (inverse slippage) | Effective coverage ($) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | AAVE | 315 AAVE | 114'975 AAVE | 22’995’000 | 500’000’000 | 20% | 100’000’000 | 85% | 85’000’000 | | AAVE/wstETH Balancer v2 | 216 AAVE | 78’840 AAVE | 15’768’000 | 162’000’000 | 20% | 32’400’000 | 90% | 29’160’000 | | GHO | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | *Merit incentives will not be touched on the legacy stkGHO, and coverage incentives will be moved to the new stkGHO. *AAVE price $200 avg for the modelling Additionally, legacy stkGHO's cooldown will be removed, which combined with the removal of slashing too will make the asset as a temporary sGHO. --- --- Disclosures BGD Labs has developed the software of Umbrella within its scope for services with the Aave DAO, but any decision to activate them will be up to the Aave governance. In addition, Umbrella is a decentralised system running on the blockchain, not by BGD Labs or any other centralised entity. --- --- Next steps If this ARFC gets approved, the next step will be the on-chain voting by AAVE holders on the activation of the system on Ethereum.

Author: Jonny Huxtable (LinkPool) Summary stake.link (https://www.stake.link) proposes adding wstLINK as a collateral asset in Aave’s Ethereum V3 market. wstLINK is a wrapped liquid staking token that enables users to earn LINK staking rewards and additional returns through DeFi strategies for stLINK and wstLINK. Its growing adoption, deep liquidity, and robust security measures make wstLINK a strong candidate to enhance Aave’s asset offerings, increase utilization of existing LINK liquidity and attract additional liquidity. Background wstLINK is the wrapped liquid staking token stLINK of stake.link, the only permissionless liquid staking protocol built for LINK staking. By leveraging stake.link users can participate in LINK staking and profit from a higher reward rate as well as composability and faster withdrawals. Key highlights of wstLINK, stLINK and stake.link include: Secure: Audited by industry-leading experts, maintaining the high standards set by Chainlink Labs: CodeHawks Cyfrin Sigma Prime Trust Security Decentralized: Powered by 15 major Chainlink Node Operators, handling over 57% of network activity (https://prism.dextrac.com/chainlink) Liquid - Instant Withdrawals, No Cooldown: Priority Pool: Withdraw instantly as long as there’s LINK (amount can be viewed here) (The Priority Pool is a holding zone that users can deposit their LINK into that automatically stakes their LINK into Chainlink Staking Contracts whenever a LINK Staker withdraws their LINK). Native Withdrawals: Withdraw LINK natively within at least 7 days. 25% of the entire LINK pool will be unbonded at any point via stake.link, there’s some edge cases but that’s generally what will be the norm. Withdrawal requests will run in a 7 day queue, if you send a withdrawal request 4 days into the queue it’ll only take 3 days etc.) Ecosystem Participant: Chainlink Labs as ecosystem participant owning roughly 7.7% of SDL supply High Adoption and TVL: stake.link holds over $74 million (~4.4m LINK) in total value locked (TVL) within its ecosystem integrated across DeFi platforms like Curve, Beefy, and Uniswap stake.link has established approximately $5 million pool of stLINK on Curve with an a-coefficient of 500 enabling liquidations on par or with significant upside for the liquidator Another $3 million of liquidity is still to migrate to the new pool The new pool features a very innovative incentive by using 3% of the generated fees by the protocol (stLINK) that are distributed as LP tokens ensuring a steady growth of the pool over time with sustainable reward rate. Benefits for Aave First-Mover Advantage: Aave would become the first lending protocol to offer LINK LST, securing its position as the leading DeFi platform for yield-generating staking assets. Yield Opportunities: By listing wstLINK, Aave users can earn LINK staking rewards in addition to traditional borrowing and lending income. This enhances capital efficiency and provides a competitive advantage over other lending platforms Increase aLINK Utilization: Currently, a significant amount of the LINK tokens on the Aave Core Instance (13 million <> $190m) is currently underutilized (5.61% Utilization) and could be staked via stake.link and wrapped for wstLINK due to the increased yield potential compared to low interest potential. This would entail a considerable benefit to Aave, Aave users and stake.link. At Yield Equilibrium (Borrow APY = Staking APY) the Revenue from Reserve Factor is roughly 11x compared to the Current Situation. Current Situation Yield Equilibrium Optimal Utilization Aave Borrow Reserve 13,000,000 LINK 13,000,000 LINK 13,000,000 LINK Aave Rewards 42,900 LINK 559,000 LINK 910,000 LINK Revenue from Reserve Factor 8,580 LINK 111,800 LINK 182,000 LINK Revenue from Reserve Factor $137,280 $1,788,800 $2,912,000 Assumptions Borrow APY 0.33% 4.30% 7% Utilization 2.10% 27% 45% Reserve Factor 20% 20% 20% LINK Price $16 $16 $16 Security and Transparency: stake.link’s advanced security measures and transparent on-chain operations ensure a high level of trust and reliability for borrowers and lenders. Specification Risk Parameters and analysis will be provided by Risk Service Providers and ARFC will be updated accordingly. Token Contracts: wstLINK on Ethereum: 0x911D86C72155c33993d594B0Ec7E6206B4C803da Liquidity Pools: Curve stLINK-LINK stablepool: 0x7e13876b92f1a62c599c231f783f682e96b91761 LINK Priority Pool: 0xddc796a66e8b83d0bccd97df33a6ccfba8fd60ea Docs: stake.link · GitHub https://docs.stake.link/ Next Steps If consensus is reached on this TEMP CHECK, escalate this proposal to the Snapshot stage. If the Snapshot outcome is YAE, escalate to ARFC stage, requesting ACI’s assistance to write the ARFC. Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Disclaimer Current proposal has been created by the Lead Core Contributor of stake.link and the founder and CEO of LinkPool, and is involved in the management of wstLINK. No compensation has been received for this proposal. Copyright Copyright and related rights waived under CC0.

Summary Aave Labs is pleased to announce an event grant proposal for 2025. This proposal includes participation in key ecosystem initiatives at EthCC Cannes and Devconnect (Location TBD), among others. Last year, facilitated by the 2024 Grant, we were able to create Open Finance Day and DeFi Renaissance Day which were hugely successful in its two editions in Brussels and Bangkok. For 2025, we have decided to select two main events in the calendar in order to continue producing strategic high quality and impactful initiatives. Goals: present Aave Protocol’s latest innovations, help facilitate and open doors to new institutional and technological partnerships and cross-chain expansion, continue cementing Aave’s brand awareness as market leaders, help expand the DeFi Ecosystem alongside DAO friends and partners, bring together Aave DAO Service Providers. Background Aave Protocol has consistently been at the forefront of DeFi innovation with pioneering features. With a strong emphasis on security, usability, and composability, Aave has amassed a vibrant and engaged community of developers, users, contributors, and stakeholders. Aave has been the indisputable market leader for years, and institutions and fellow blockchain partners recognize this. Aave is and should continue to lead the DeFi sector towards its consolidation, especially in this new year, where they have been experiencing the highest wave of adoption, paired with a much friendlier attitude towards crypto coming from governments and institutions. Aave Protocol and its DAO are already the stewards of DeFi. Through hosting our own educational and networking events (DeFi Renaissance Day) and the powerful rAAVE as the main recreational event on the conference circuits, Aave Labs helps reinforce the hard work and milestones achieved by the DAO. Overview Aave Labs is requesting a grant for $750,000 paid in GHO for events in 2025: 1. DeFi Summer Day at EthCC and Devconnect: we are looking to continue this event series. The events started in Brussels as Open Finance Day, and continued in Bangkok under its current name. Both events were extremely successful, among the most popular events in the respective calendars. We brought together the most prominent voices in DeFi to discuss the topics of the moment, in high production settings. This allowed us to leverage complementary external networks, credibility, and resources for the event. The events served as a display of the strength and the proficiency of the Aave Protocol brand.\ The DeFi Day events are financed in collaboration with a selected group of aligned partners, that help as well in bringing awareness, expanding audience and elevating the brand value of the series. Some of the previous sponsors were: ZKSync, Chainlink, Sky, Lido, Uniswap, Scroll, Centrifuge, and Ethena Labs. 2. Merch: Aave Labs seeks to create highly coveted Aave and GHO branded merchandise to distribute at events, as part of community engagement and awareness-building efforts as well as to proliferate the ghost. Aave Labs will continue to push for the use of sustainable materials and creation of merch people actually wear, use, and love. 3. rAAVE: To celebrate the community’s welcoming culture, we plan to host two more editions of the flagship rAAVE event. Throughout the past years rAAVE has positioned itself to be the most sought after event in the ecosystem. They foster community spirit and create memorable experiences. We will integrate the GHO Pass for ticketing logistics and manage press relations and social media to maximize awareness and inclusion. This year’s events will be hosted at EthCC in Cannes and Devconnect (Location TBD). Notably last year we successfully mitigated costs for the DAO by sourcing sponsors (Aptos and Chainlink) for rAAVE Bangkok, and the model proved successful, so we’ll be following this strategy in 2025. 4. Side events currently being considered for small sponsorships and activations include: Aave v4 developer meetups and a hackathon, small self-hosted networking events and dinners during Berlin Blockchain Week, Token 2049 Singapore, Korea Blockchain Week, RWA Summit series, Stable Summit series and Chainlink SmartCon. Funds from any side events that are not confirmed will be rolled over to the next potential side event. The majority of the grant will be used to create an impactful presence during Devconnect and EthCC. DevConnect week will be the marquee event of the year. After covering the aforementioned main sponsorships, any remaining budget will be directed towards side events related to the security of DeFi and smart contract technology. Any excess funds from this grant will be rolled over to be used for events during Q1 2026. We’re pleased to confirm that the 2024 events strategy, which included careful budget allocation and partnering with top tier projects to co-finance the events, has resulted in $160,000 unspent funds that are being carried over towards the 2025 events.The proposed budget is in line with previous spending for similar events and covers all events of 2025. A recap on last year’s events was posted to governance last February, here. Aave Labs shall cover all travel expenses for its team members, and this proposal does not request any funds for these expenses, or include any compensation for Aave Labs’ work. Next Steps ● ARFC ● If Snapshot is successful, then move to AIP Conclusion We believe that the proposed one-off budget allocation of $750,000 paid in GHO for activations and events for 2025 will not only help enrich the Aave Protocol ecosystem, but will foster innovation, brand expansion and recognition.

[ARFC] Supply and Borrow Cap Risk Oracle Constraint Specification Author: Chaos Labs Date: 2025-05-15 Summary The deployment of Supply and Borrow Cap Risk Oracles across Avalanche, Base, and Arbitrum has proven to be highly robust and operationally efficient, collectively underwriting over $3.5 billion in total deposits and performing 140 collective updates since its launch a few months ago. This successful rollout has affirmed the framework’s ability to manage cap adjustments dynamically while strictly adhering to defined constraints. As the system scales across more markets, it becomes increasingly important to establish clear, standardized criteria for where automation is appropriate, ensuring continued protocol safety, effective governance, and consistent application of risk controls. This addendum outlines a refined framework to standardize which asset types are eligible for automated cap adjustments under the Risk Oracle system. While the core automation mechanism is designed to enhance the scalability, efficiency, and responsiveness of cap management across Aave markets, not all assets exhibit risk profiles or maturity levels that make them suitable for autonomous updates. To that end, this proposal introduces specific exclusion criteria that ensure automation is applied conservatively and only where appropriate. These constraints are rooted in protocol maturity, liquidity stability, and usage characteristics, and they are designed to maintain a prudent balance between automation and manual oversight. The newly defined constraints are as follows: 1. Asset Inception Window (Minimum 30-Day Maturity Requirement) Assets that have been listed on Aave for fewer than 30 days are excluded from the Risk Oracle’s automation logic. Rationale: Newly listed assets typically experience volatile and unrepresentative usage patterns that may not reflect long-term user behavior. A 30-day buffer ensures that demand signals within the protocol are more stable and better suited for risk-adjusted modeling. Operational Impact: These markets require manual cap assessments to accommodate early-stage adjustments. This manual pathway allows for more flexible increases beyond the conservative limits enforced by the Risk Oracle. 2. E-Mode-Only Collateral Excluded Assets that are only enabled for use as collateral within E-Mode, and not allowed as general collateral outside of E-Mode, are exempt from automated cap increases. Rationale: These assets typically serve single-purpose use cases with limited composability, often in growth-oriented or speculative scenarios. As such, they exhibit non-diversified, concentrated behavior with elevated systemic correlation risks. Risk Management Principle: Restricting Risk Oracle automation ensures greater human oversight over assets that may be tightly bound to a single borrowing corridor or incentive mechanism. 3. Minimum Market Size Threshold for Cap Changes The Risk Oracle framework excludes markets with a nominal cap size below $5 million from any automated cap changes, both increases and decreases. Rationale: Smaller markets exhibit higher sensitivity to usage fluctuations, fragmented liquidity conditions, and early-stage volatility. Moreover, the Risk Oracle’s automation is deliberately constrained to a conservative +30% maximum adjustment, in contrast to the +100% allowed under manual Risk Steward intervention. For smaller markets, this tighter adjustment range may not provide sufficient flexibility to accommodate growth dynamics or respond to sharp risk changes. Application: In markets under the $5M threshold, both cap increases and decreases are managed manually, ensuring higher-touch, context-aware governance and risk evaluation until the market matures. Disclaimer Chaos Labs has not been compensated by any third party for publishing this ARFC. Copyright Copyright and related rights waived via CC0

Summary This publication proposes launching a targeted incentive campaign to accelerate Aave's adoption and growing market share on the Base network. Motivation During April variable Debt on Base has increased strongly on Aave Protocol from 337.9M to 377.9M, an 11.83% increase, meanwhile user deposits increased by only 3.92%. The growing demand for liquidity creates a competitive environment for both attracting user deposits and providing attractive funding rates. The chart below highlights the improvement in demand for liquidity on the Base instance of Aave v3. The recent uptick in debt during April was only bettered by Avalanche and Ethereum v3 instances. Whilst Base continues to grow, Aave's positioning can be improved by capturing a large portion of the debt expansion in the coming months. !Screenshot 2025-05-03 at 00.05.54 With the use of incentives to create an improved deposit yield and lower cost of capital for borrowers, the resulting demand is expected to attract new liquidity deposits and new users seeking access to lower borrowing costs. Improving the value proposition for the end user is expected to strengthen Aave's positioning within the Base ecosystem. Incentives Allocation With the use of targeted incentives and enhanced capital efficiency, the expected returns are strengthen by only rewarding Aave aligned user actions. The MASiv incentive distribution platform provides the infrastructure needed to reward users who migrate liquidity to Aave Protocol whilst also recognising the loyalty of existing users. The table below outlines the initial rewards to be distributed to eligible users of Aave Protocol. The core component on the program relies on providing users with a low cost of capital whilst providing an attractive deposit rate that exceeds the SSR within defined budgetary constraints. | Action | Borrow Rewards | Campaign Duration | Reward Asset | Criteria | | :---------: | :-------------: | :---------------: | :----------: | :-------------------------- | | Borrow USDC | 2.00% up to 250M before dilution | 6 months | aUSDC | Borrow USDC whilst having no idle USDC or aUSDC holdings. When total USDC debt on Aave exceeds 250M the rewards begin to dilute with increasing debt pro-rata. ie: 500M USDC debt equates to 1.00% in rewards.| | Borrow GHO | 2.50% up to 50M before dilution | 6 months | aGHO | Borrow GHO whilst having no idle or aToken stablecoin holdings. When total GHO debt on Aave exceeds 50M the rewards begin to dilute with increasing debt pro-rata. ie: 100M GHO debt equates to 1.50% in rewards. | An additional boost is to be provided to users who meet the criteria outlined below. To support identifying eligible users, a Snapshot of non Aave Protocol users was taken on the 2nd May 2025. | Action | Supply Boost | Campaign Duration | Reward Asset | Criteria | | :---------: | :-------------: | :---------------: | :----------: |:-------------------------- | | Deposit cbBTC | 0.20% | 3 months | acbBTC | Migrate 100% of holdings from Morpho on Base and/or Ethereum to Aave on Base, Borrow USDC, GHO, WETH or EURC, Maintain Health Factor <2 with no idle or aToken USDC, GHO, WETH or EURC holdings.| | Deposit wstETH | 0.50% | 3 months | awstETH | Migrate 100% of holdings from Morpho to Aave on Base only, Borrow USDC, GHO, WETH or EURC, Maintain Health Factor <2 with no idle or aToken USDC, GHO, WETH or EURC holdings.| | Deposit USDC | 1.00% | 3 months | aUSDC | Withdraw 100% of holdings from Moonwell and Gauntlet vaults on Morpho on Base to Aave on Base. | | Deposit GHO | 1.25% | 3 months | aGHO | Withdraw 100% of USDC holdings from Moonwell and Gauntlet vaults on Morpho on Base to Aave on Base. | | Deposit ETH | 1.25% | 3 months | aWETH | Migrate 100% of holdings from Moonwell and Gauntlet vaults on Morpho to Aave on Base Network. | | Deposit ETH | 1.50% | 3 months | aWETH | Migrate 100% of holdings from Moonwell and Gauntlet vaults on Morpho on Base to Aave on Base only, Borrow USDC or EURC, Maintain Health Factor <2 with no idle or aToken stablecoin holdings. | | Deposit ETH | 1.75% | 3 months | aWETH | Migrate 100% of holdings from Moonwell and Gauntlet vaults on Morpho on Base to Aave on Base only, Borrow GHO, Maintain Health Factor <2 with no idle or aToken stablecoin holdings. | For example: A user with cbBTC on Morpho at the time of Snapshot can migrate 100% of the position to Aave, borrow USDC and GHO such that the health factor of the loan is <2 and earns 0.35% deposit yield, receive 2% discount on the USDC debt and 2.50% discount on any GHO debt. The GHO portion of the debt receives a 3.00% discount whilst the USDC portion of the debt receives 2.50% discount. If the borrowed USDC or GHO is held idle or deposited into Aave, the user receives no USDC and no GHO debt rewards. If 99% of the cbBTC position withdrawn and migrated to Aave, but 1% remain on Morpho, user receives no deposit deposit yield. If the cbBTC price appreciates and the Health Factor is >2, the user forgoes the 0.35% deposit yield for this duration of time. Users are encouraged to manage the position on Aave to ensure eligibility is maintained. Funding Aave has accumulated significant revenues on the Base network via its Collector contract. To further stimulate growth, adoption on Base, this proposal aims to reinvest past revenue directly into ecosystem incentives. Since the Base instance was deployed a total of 1.3M USD in revenue has been generated for the Aave DAO with 675,510 USD year to date. The Reserve Factor (Borrow Fees) is the dominant fee type generating 365.7K during Q4 2024 and 397.7K during Q1 2025, with liquidation fees providing a notable 140.6k USD contribution during Q1. The charts below shows the weekly revenue generated by the Aave Protocol, Velora integration on the frontend and aTokens held in the Treasury. !Screenshot 2025-05-02 at 23.31.28 !Screenshot 2025-05-06 at 21.53.17|1318x414 To fund the upcoming incentive campaign, USDC, USDbC and cbBTC aTokens held in the Treasury is to be reinvested directly into ecosystem incentives. The ETH rewards component is to be funded from the existing Ahab Budget and GHO rewards mostly funded from the ALC budget. Based upon Q1 2025 USDC Reserve Factor revenue, 236.1K USD, without considering the impact of the program, approximately 39% of the associated USDC Borrow Rewards cost would be recovered. If 100% growth in USDC debt is achieved, revenue would double along with the USDC Borrow Rewards cost. !Screenshot 2025-05-03 at 13.08.07 Granting the AFC the permission to claim and transfer these funds to the MASiv address will enable efficient reinvestment of capital, supporting user growth, liquidity incentives, and ecosystem expansion on Base. This ARFC proposes to grant the Aave Finance Committee (AFC) the allowance to claim all the revenues currently accrued to the Aave Collector on Base. The claimed revenues will be directed to the MASiv address to be used as incentives for the Aave ecosystem on Base. Specification Create allowances for the Aave Finance Committee to fund the Base incentive campaign. | Asset | Amount | Address | | -------- | -------- | -------- | | aBasUSDC | ALL | Base: 0x4e65fE4DbA92790696d040ac24Aa414708F5c0AB | | aBascbBTC | ALL | Base: 0xBdb9300b7CDE636d9cD4AFF00f6F009fFBBc8EE6 | | aBasUSDbC | ALL | Base: 0x0a1d576f3eFeF75b330424287a95A366e8281D54 | | aEthUSDC | 2.4M | Ethereum: 0x98C23E9d8f34FEFb1B7BD6a91B7FF122F4e16F5c | Spender: AFC 0x22740deBa78d5a0c24C58C740e3715ec29de1bFa Method: approve() aBasUSDC, aBascbBTC and aBasUSDbC on the Aave Base Collector contract 0xBA9424d650A4F5c80a0dA641254d1AcCE2A37057to the AFC address All claimed funds will be sent to the MASiv address when the whole incentive structure is finished, which will be responsible for managing and distributing incentives on Base. Disclosure TokenLogic does not receive any payment for this proposal. Next Steps 1. Gather feedback from the community. 2. If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage. 3. If Snapshot outcome is YAE, an AIP will implement this proposal. Copyright Copyright and related rights waived via CC0.

Title: [ARFC] Deploy 5M USDC for GHO Market Making on Gnosis Chain Author: @kpk Date: 2025-05-11 Summary This ARFC proposes allocating 5 million USDC for market-making activities of the GHO token on Gnosis Chain. The funds will be managed non-custodially under kpk’s mandate with Aave, with the goal of enhancing liquidity, particularly for GHO / USDC.e and GHO / EURe, and minimizing price impact, all without additional fees to the DAO. Motivation Deploying GHO on Gnosis Chain is a critical step in expanding its reach and utility, particularly as Gnosis Chain grows with use cases like Backed Assets and Gnosis Pay. To support this expansion, deep and responsive on-chain liquidity is essential. When GHO is launched on a new blockchain, significant incentives are typically required to bootstrap liquidity, which is foundational for enabling composable DeFi services on top of existing markets. This early liquidity, however, is often passive and does not respond dynamically to price imbalances or shifts in market demand. This proposal addresses that challenge by deploying active, non-custodial liquidity through kpk-managed positions. This approach tackles two key limitations at once: 1. It reduces the need for high incentive costs typically associated with passive liquidity mining, and 2. It ensures liquidity can respond to market conditions, contributing to healthier and more efficient pools. Liquidity would be provided to key pairs, including GHO / USDC.e and GHO / EURe, and leveraging a non-custodial management system for transparency and security. It aligns with Aave’s goals and requires no additional compensation, as it falls under kpk’s existing mandate with Aave. Specification Source of Funds In order to fund this proposal, 5M USDC should be bridged to the Gnosis Chain. Use of Funds The 5M USDC will be allocated across a series of liquidity pools and strategies to support the GHO token’s stability and adoption. The core activities will include: Liquidity provisioning between GHO / USDC.e and GHO / sDAI, to support deep liquidity with other major stablecoins in the GC ecosystem Liquidity provisioning between GHO / EURe, to facilitate future integrations with Gnosis Pay Deposit or withdraw - swap - GHO from the market to stabilize the price during volatile periods. Liquidity pools will be deployed mainly in Uniswap v3 and Balancer (specially once sGHO is deployed). As additional fiat-backed stablecoins are added (e.g. with Gnosis Pay expansion to other countries), new GHO pairs may also be introduced. The strategies will aim to: Kickstart liquidity with key stablecoin pairs Maintain tight spreads Reduce price impact for common trade sizes. Enable healthy arbitrage and cross-pair parity among GHO and other stables Asset Management Architecture Funds will be managed using kpk Permissions in a dual multisig system: 1. Avatar Safe (Portfolio Wallet) Holds custody of funds, controlled by Aave-affiliated signers Controlled by trusted Aave-affiliated signers kpk will act as a transaction proposer for permission updates, with no direct signing authority over assets. This ensures accountability and separation of roles. 2. Manager Wallet Safe Holds permissions to execute pre-approved transactions Does not hold DAO assets Controlled by kpk !5m.png This non-custodial and trust-minimised operational setup illustrates kpk’s core asset management pipeline: kpk controls a Manager Wallet (Safe) assigned with a manager role, which enables us to execute transactions on behalf of the Portfolio Wallet (Safe) within the scope of the On-Chain Permissions Policy. This system ensures: Flexibility: kpk will be able to manage positions within the scope of the On-Chain permissions with the required agility to interact with market movements; Security without compromising execution speed. The only actions allowed are the ones validated on the On-Chain Permissions Policy, ensuring the scope defined will be respected while granting execution agency to the Manager Wallet Ownership without increasing operational workload for the Portfolio Wallet signers. The Portfolio Wallet retains ownership of all assets, but the Manager Wallet handles all operational maintenance of the positions. Proposed Signers: Avatar Safe (Portfolio Wallet): Representatives from ACI, Aave Labs, TL, and BGD/Certora Manager Wallet Safe: Signers from kpk KPIs and Objectives: This initial allocation will be used to achieve the following: Price impact: Less than 0.1% on 1M swaps for USDC.e, less than 0.5% on 100k swaps for EURe Next Steps After community feedback, the proposal will proceed to an ARFC Snapshot vote. If approved, kpk will: Set up Safe infrastructure and share initial permissions for review Coordinate with @tokenlogic the proposal for asset transfer to the Avatar safe Deploy liquidity pools Copyright Copyright and related rights waived via CC0.

[ARFC]:Onboarding wETH to Aave V3 Celo Instance Author: ACI Date: 2025-04-09 Risk Parameters have been provided by Risk Service Providers and ARFC has been updated accordingly. 2025-04-16 --- Summary This ARFC proposes the onboarding of Wrapped Ether (wETH) as a supported asset on the Aave V3 Celo Instance. The integration aims to expand the protocol's utility and provide users with additional opportunities for lending and borrowing. Motivation The addition of wETH to Aave V3 on Celo would: Increase TVL and protocol revenue Provide users with a major DeFi asset for lending/borrowing Enable cross-chain strategies involving ETH Enhance the protocol's competitive position in the Celo ecosystem Specification Risk Parameters have been provided by Risk Service Providers and ARFC has been updated accordingly. 2025-04-16 | Parameter | Value | | --- | --- | | Asset | WETH | | Isolation Mode | No | | Borrowable | Yes | | Collateral Enabled | Yes | | Supply Cap | 500 | | Borrow Cap | 450 | | Debt Ceiling | - | | LTV | 78.00% | | LT | 80.00% | | Liquidation Penalty | 7.50% | | Liquidation Protocol Fee | 10.00% | | Variable Base | 0.0% | | Variable Slope1 | 2.7% | | Variable Slope2 | 80.00% | | Uoptimal | 90% | | Reserve Factor | 15% | | Stable Borrowing | Disable | | Flashloanable | Enabled | | Siloed Borrowing | Disabled | | Borrowable in Isolation | Enabled | | E-Mode Category | N/A | Celo-native bridged wETH Contract Address: 0xd221812de1bd094f35587ee8e174b07b6167d9af Disclosure The ACI did not receive compensation for creation this proposal. Next Steps 1. Publish a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage. 2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived via CC0.

[ARFC] Deploy Aave on Soneium Author: ACI Date: 2025-02-27 ARFC updated with latest Risk Params 2025-03-14 Summary This proposal advocates for the deployment of Aave on Soneium, an Ethereum L2 developed by Sony Block Solutions Labs (a joint venture between Sony Group Corporation and Startale Group). The proposal aims to provide general background information to gauge the community’s interest in the opportunity to deploy Aave V3 on Soneium. Previous [[TEMP CHECK] Deploy Aave on Soneium](https://governance.aave.com/t/temp-check-deploy-aave-on-soneium/20999) and Snapshot have passed. Motivation This deployment proposal is an opportunity to tap into a consumer-focused Ethereum L2 and utilize Sony’s distribution channels and access to real-world consumers. Built with OP Stack, Soneium offers a scalable, low-cost, and highly interoperable infrastructure for DeFi protocols. The deployment would integrate Aave into an Ethereum L2 designed for mainstream adoption, potentially tapping into Sony’s user base and an upcoming dynamic ecosystem of DeFi, gaming, NFTs, RWAs, and entertainment applications. The proposal includes an ecosystem-wide liquidity incentive campaign, targeting a 7-figure USD commitment (100,000,000 ASTR) to support DeFi protocols, including Aave, to bootstrap liquidity on Soneium. Soneium is also willing to integrate and increase the adoption of GHO stablecoin in its ecosystem, especially for future real-world-focused use cases. Sony Block Solution Labs believes that the development of a comprehensive Web3 solution based on blockchain technology has big potential for the company, which has developed a wide variety of businesses as part of its purpose to “fill the world with emotion, through the power of creativity and technology”. Soneium launched its mainnet on January 14, 2025, settled 10M+ on-chain transactions with 2M+ unique wallet addresses as shown on Blockscout, and achieved $45M+ total value secured according to L2Beat, within 3 weeks. Soneium has also launched the Soneium Spark Incubation Program, attracting over 1,700 builders and projects. The participating Sony Group Companies include Sony Group, Sony Music, Sony Pictures, Sony Innovation Fund, Inzone, and Sony Global Education. Please refer to here for the list of winners of the first Soneium Spark. We see DeFi as the backbone of blockchain adoption and is built with a vibrant DeFi ecosystem that promises to be both innovative and robust, featuring a well-rounded mix of multichain and native protocols. Notable names including Uniswap v4, Velodrome, QuickSwap, Stargate, Squid, Lido, Mellow, StakeStone, KelpDAO, Solv, OpenEden, etc. Our Soneium Spark program also incubated several standout projects that will be launching as native DeFi protocols on Soenium, bringing unique features and services to our users, including Kyo Finance (AMM), SoneX (AMM), SuperVol (On-chain Options), WaveX (Perpetuals), Macaron Finance (Leveraged Farming), etc. In addition to the existing Web3 services, the Soneium team has been investigating how new services that collaborate with businesses within the Sony Group can be developed as Soneium-compatible apps. Specifically, we will explore protecting the rights of content created by creators, new mechanisms for distributing profits to support creators and fans, and opportunities for creators to be active across the digital and real worlds. Furthermore, by utilizing Web3 services, such as the Japan-regulated crypto exchange operated by Sony Group’s S.BLOX Inc., and adding new value to the various businesses and utilizing IPs, we aim to create apps that can be used daily by people who have never had the opportunity to experience Web3, and to build a world where Web3 services permeate people’s daily lives. Reasons for Integration: Potential to tap into the existing users from the Sony ecosystem and further expand Aave user base with Soneium’s distribution networks and go mainstream together. Soneium settled 10M+ on-chain transactions with 2M+ unique wallet addresses and achieved $45M+ total value secured within 3 weeks after launch. Establish Aave’s position as the major liquidity market and early mover on Soneium and capture a rapidly growing market in the ecosystem with a focus on real-world adoption (e.g. JPY-USD carry trade on-chain to explore, etc.) * We envision Soneium to be one of the most unique ecosystems in the crypto world that truly foster Web3 mainstream adoption utilising Sony’s distribution channels and business opportunities. We see Aave as an important and reliable partner to facilitate users’ demand in lending, borrowing, leveraging, and earning passive income. Integrate closely with Soneium’s rapidly growing DeFi ecosystem, including strategic integrations with top-tier dApps like Uniswap, Velodrome, QuickSwap, Stargate, Squid, Lido, StakeStone, Mellow, Solv, OpenEden, etc. Soneium has been in the first batch of blockchains for Uniswap v4 deployment with Uniswap frontend supported by Uniswap Labs. Operates in a high throughput, tps, and low gas fees environment based on OP Stack to provide a smooth UX and efficient lending experience. Soneium is also equipped with top-tier infrastructures including Chainlink, Pyth, RedStone, LayerZero, Axelar, Superbridge, Across, Hyperlane, Li.Fi, Jumper Exchange, The Graph, etc. Receive liquidity incentives for Aave depositors in any upcoming ecosystem-wide liquidity incentive campaign on Soneium from now to the future and help Aave bootstrap liquidity on Soneium. * We have been working on a 100M-ASTR (worth of $4M now) liquidity incentive campaign for mainnet launch at the moment as a starter, which can include Aave if Aave’s deployment timeline aligns. More details can be found here. Technical Feasibility 1. Seamless Integration and Compatibility with v3: Soneium is an EVM-equivalent Ethereum L2 built using OP Stack, which means Ethereum smart contracts are fully compatible. 1. Chainlink Integration: Chainlink has deployed Chainlink Data Feeds and Chainlink Data Streams on Soneium, supporting a wide variety of assets including BTC, ETH, wstETH, USDC, etc. 1. The Graph Integration: The Graph has integrated with Soneium and has Full Protocol Support for data indexing on Soenum. 1. Development and Testing Startale Group will assist Aave’s technical team through its Integration and Support team to ensure a smooth integration. 1. Security Audits: Startale Group will cooperate with the Aave DAO in order to run audits to ensure that the deployment meets all security requirements, should this be requested by the DAO. Deployment Plan 1. Phase 1: Initial Discussion Gather community feedback through this TEMP CHECK. 1. Phase 2: Detailed Proposal If the TEMP CHECK indicates positive support, submit a detailed ARFC (Aave Request for Comment) outlining the technical, economic, and security aspects of the integration. 1. Phase 3: Implementation and Monitoring Upon eventual approval, deploy Aave V3 on Soneium and monitor the integration closely to address any issues and ensure stability. Risks and Mitigations: 1. Technical Challenges: Startale Group will work closely with Aave’s developers and service providers to address any technical challenges during integration. 1. Security Risks: We are open to conducting security and risk audits to identify and mitigate potential risks associated with this proposal and deployment. Startale Group will be available to address raised concerns, and support these potential audits. 1. Community Adoption: Soneium and Astar will activate its community to engage with the Aave community ensuring support and adoption. Also it will work aligned with the Aave community to engage and attract users to Soneium. Specification: Based on our analysis of TVL and other key metrics, asset data on Soneium is likely to experience significant fluctuations as deployment nears. Therefore, we will not be publishing initial asset parameters at this stage. Instead, we will assess real-time market conditions and provide the relevant parameters closer to deployment. | Asset | Supply on Soneium | Market Cap on Soneium | 24H DEX Volume on Soneium | Sell Liquidity | SoneiumScan | | --- | --- | --- | --- | --- | --- | | WETH | 6,397 | $12.00M | $3.97M | $470K | URL | | USDC.e | 14,798,955 | $14.79M | $4.31M | $958K | URL | | USDT | 2,011,410 | $2.01M | $309.30K | $630K | URL | Useful Links: Soneium Website: https://soneium.org/ Soneium L2Beat: Soneium - L2BEAT Soneium Blockscout: https://soneium.blockscout.com/ Soneium Defillama: https://defillama.com/chain/Soneium Sony Block Solution Labs Website: Sony Block Solutions Labs Pte. Ltd. Sony Web3 Solution: Launch of a comprehensive blockchain-centric Web3 solution Startale Group Website: Startale ACS Liquidity Incentive Campaign: Treasury Proposal for ACS Campaign - Treasury Proposals - Astar Forum Aave Documentation: Aave Protocol Overview [[TEMP CHECK] Deploy Aave on Soneium](https://governance.aave.com/t/temp-check-deploy-aave-on-soneium/20999) Snapshot Disclaimer: This proposal is powered by Skywards. The ACI is not directly affiliated with Soneium and did not receive any compensation for creating this proposal. Next Steps 1. Publish an ARFC to continue gathering community and Service Providers feedback, and escalate to ARFC Snapshot if conditions are met. 2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived under CC0.

[TEMP CHECK] Add PEPE as a Supported Asset on AAVE Summary This is a proposal to add PEPE as a supported collateral asset on the AAVE lending platform. Motivation PEPE is a widely held, highly liquid asset in the crypto ecosystem. Its rapid growth in adoption, substantial trading volumes, and deep liquidity across major centralized and decentralized exchanges make it a natural candidate for integration into AAVE. Adding PEPE could: Expand AAVE’s market reach and attract a new demographic of depositors and borrowers. Help fuel the growth of GHO, AAVE’s native stablecoin, by increasing the available collateral base for GHO minting. Generate additional liquidation income for the AAVE protocol. Given PEPE’s nature as a meme-driven asset, it is reasonable to expect elevated levels of borrowing, speculation, and resulting liquidations — all of which could accrue value to the AAVE DAO. Further diversify the asset options available to users while carefully managing risk through isolated market controls. Specification This proposal would achieve the following: Add PEPE as an isolated collateral asset within the AAVE ecosystem. Assign conservative risk parameters appropriate for a volatile asset (to be proposed by risk managers and community discussion). Notes: Initial risk parameters (such as Loan-to-Value ratios and liquidation thresholds) would be recommended by our risk management partners as part of the next steps. Disclaimer I hold 98,465 AAVE tokens personally. I do not hold PEPE tokens personally. This proposal reflects my opinion that PEPE’s inclusion could be beneficial to AAVE’s growth and diversity, but users should independently evaluate any risks. Next Steps I am posting this [TEMP CHECK] to invite discussion and feedback from the community. If there is positive sentiment, I would encourage AAVE governance and risk teams to engage in further analysis, risk modeling, and formal onboarding steps for PEPE. Copyright No claims to copyright with this post.

[ARFC] Onboard tETH to Aave v3 Prime Instance Author: ACI ( Aave Chan Initiative) Date: 2025-04-21 ARFC has been updated 2025-05-05 with latest Risk Parameters provided by Risk Service Providers. --- Summary This proposal aims to onboard tETH to Aave V3 Prime Instance, after successful [[TEMP CHECK] Onboard tETH to Aave v3 Prime Instance](https://governance.aave.com/t/temp-check-onboard-teth-to-aave-v3-prime-instance/21566) and TEMP CHECK Snapshot. Motivation Assets like tETH are designed to unify fragmented interest rate markets and optimize yield generation. Users contribute ETH and receive tETH, redeemable for their initial ETH plus additional yield. This yield comes from a dynamic strategy that balances staking rewards and interest rate arbitrage on lending protocols. For tETH, this ensures baseline yields equivalent to native ETH staking while capturing additional returns from rate inefficiencies. These assets are composable across DeFi, enabling broader usability. By onboarding tETH to Aave V3 Prime Instance, we can: Enhance capital efficiency: Users can borrow against tETH, unlocking liquidity while continuing to earn restaking rewards. Increase protocol revenue: More borrowing activity leads to higher interest income for Aave. Expand Aave’s influence in restaking finance: Positioning Aave as a central lending hub for LRTs. Specification Risk Parameters have been updated by Risk Service Providers and ARFC has been updated accordingly. 2025-05-05 | Parameter | Value | | --- | --- | | Asset | tETH | | Isolation Mode | N/A | | Borrowable | No | | Collateral Enabled | Yes | | Supply Cap | 20,000 | | Borrow Cap | - | | Debt Ceiling | - | | LTV | 0.05% | | LT | 0.10% | | Liquidation Penalty | 7.50% | | Liquidation Protocol Fee | 10% | | Variable Base | - | | Variable Slope1 | - | | Variable Slope2 | - | | Uoptimal | - | | Reserve Factor | - | | Stable Borrowing | Disabled | | Flashloanable | Yes | | Siloed Borrowing | No | | Borrowable in Isolation | No | | E-Mode Category | tETH/wstETH | E-Mode | Parameter | Value | Value | | --- | --- | --- | | Asset | tETH | wstETH | | Collateral | Yes | No | | Borrowable | No | Yes | | Max LTV | 92.00% | - | | Liquidation Threshold | 94.00% | - | | Liquidation Bonus | 2.00% | - | tETH/WETH CAPO | maxYearlyRatioGrowthPercent | ratioReferenceTime | MINIMUMSNAPSHOTDELAY | | --- | --- | --- | | 12.04% | monthly | 14 days | Useful links https://www.treehouse.finance/ https://docs.treehouse.finance/protocol/teth/introduction Disclaimer This proposal is directly powered by ACI (Aave Chan Initiative). ACI did not received compensation for creation of this proposal. Next Steps 1. Collect community & service providers feedback before escalating proposal to ARFC snapshot stage. 2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived via CC0.

Summary Chaos Labs proposes the implementation of a risk oracle to set optimal interest rate curves for stablecoins within the Aave protocol. We select a slope1 parameter that would lead to the best attainable protocol welfare, operationalized as constrained gross revenue, based on a dynamic analysis of borrowers' aggregate responses to interest rate changes and total supply fluctuations. The primary components of the oracle architecture comprise: Demand models - a demand model is an object that encapsulates certain assumptions about the behavior of protocol borrowers and specifies an approach to estimating the numeric parameters that pin down this behavior Demand model estimation - given a demand model, parameters characterizing borrower behavior can be determined using aggregate market data, with the model's accuracy evaluated out of sample Model selection - the oracle pipeline estimates multiple demand models and evaluates their performance on out of sample historical data, so that the best model can be selected to drive the protocol optimization model Protocol optimization - using the best demand model available to predict borrower response to interest rate changes, we determine the best slope parameter to maximize protocol welfare, subject to certain guardrails The demand and protocol welfare models underlying the oracle transform aggregate market observables directly into a slope parameter recommendation, subject to programmable constraints implementing safety guardrails. As a concrete example, the constraints ensure that deviation from current parameter is appropriately restricted and that counterfactual demand induced by the optimal slope parameter does not breach utilization limits at any time. Model flow !image.jpg Motivation Risk management requires setting parameters in a manner that safeguards the protocol against extreme events. Existing workflows that lead to particular recommendations for changes to protocol configuration, such as the shape of the interest rate curve, are driven by this consideration. We are proposing an oracle that would supplement this workflow, taking some of the critical elements of a risk configuration as a given and optimizing the protocol for an objective distinct from “minimizing bad debt accrual during periods of extreme volatility.” Here, we still treat risk management as the primary consideration, accepting some elements of the existing protocol configuration as an explicit constraint, while attempting to achieve constrained optimal protocol welfare. The current approach for updating interest rates, utilizing the risk steward contract, allows for a maximum adjustment to the slope1 parameter of 100 bps every three days. However, this method requires considerable operational effort, as it involves manually creating a series of transactions to modify the interest rate curve across more than 60 stablecoin markets on 16 deployments, with a process akin to the one presented in Supply and Borrow Cap Risk Oracle Activation. This process becomes especially inefficient during repricing events, where the manual overhead and fundamental constraints hamper the ability to respond dynamically to changes in demand. As Aave is the largest DeFi lending protocol, especially in terms of aggregate stablecoin liquidity, it effectively boasts the title of the primary market when deducing the market-priced interest rate on-chain. It is therefore essential to adopt a generalized, transparent, and robust methodology grounded in aggregate demand models—mathematically simple yet capable of generating meaningful predictions about future borrower behavior to optimize its configuration accordingly. By using multiple models and selecting the best ones dynamically, we ensure that the methodology is flexible enough to capture the evolving characteristics of demand for stablecoins, taking advantage of variation in supply to estimate demand model parameters. This approach does not rely on interest rate variation or any assumptions on the origin of existing interest rate curve parameters, making it robust to feedback loops. Data We model the demand, or total borrowing, as aggregate demand curves, or mathematical functions relating the prevailing market interest rate to demand. The particular shape of any such curve encodes the behavior of protocol borrowers in response to changes we make to the interest rate curve parameters. Each type of demand curve is defined by some parameters, which we can estimate using aggregate market data. The aggregate market data feeding into the model estimation component tracks total borrowing, supply and other market characteristics, such as the current interest rate curve settings, for supported chains, tokens and markets at a ~10-15 minute cadence. All estimation and protocol optimization utilize the observations at each update, although our analysis will use some quantities aggregated to daily or hourly levels, for the reader's convenience. Demand Demand models Conceptually, a demand model should be thought of as a triple consisting of a demand function, estimation objective and loss function. The demand function captures the aggregate change to total borrowing in response to a change in the interest rate curve. The estimation objective and loss function determine how the demand curve is fit to historical data. The demand functions represent downward sloping aggregate demand, with some scale parameter A, characterizing the overall level of demand, and a parameter σ characterizing the elasticity, or the relative magnitude of the demand response to a change in interest rates. Our demand functions are isoelastic - Ax^σ, the elasticity parameter fixes the price elasticity at all points along the curve exponential - Ae^(-σx) linear - A + σx, the elasticity parameter is the slope of the line Estimation objectives represent the deviation that the estimation program attempts to minimize according to some loss function price - deviation from observed price, given the estimated demand and implied price demand - deviation from observed demand Finally, the loss functions are L1 - minimizes the sum of absolute deviations, relatively insensitive to outliers L2 - minimizes the sum of squared residuals Consequently, we estimate a total of up to 12 different demand models for each run of the estimation and protocol welfare optimization pipeline, selecting the best one to serve as the representation of demand response for the protocol welfare optimization program. Estimation Model estimation strategy In order to use a demand model for predicting counterfactual borrower response to adjustment in the interest rate curve parameters, we must recover the values of the scale and elasticity parameters from historical data. The demand model parameters for a particular function are estimated using non-linear regressions, minimizing the selected loss relative to the target determined by the objective. The particular choice of loss function determines the influence of outliers in the estimation. Minimizing loss can be thought of as finding a function in a particular class (e.g., isoelastic demand curves) that is “closest” to the observed data, with “closeness” measured by the chosen loss function. This “closest” function is identified, within its class, by the values of its parameters. We do not compute standard errors or other explicitly statistical constructs, as we are concerned primarily with prediction rather than statistical inference. To elaborate on this further, the purpose of a typical econometric exercise of this nature, as might be performed by a practitioner of demand modeling in academia or economic consulting, is to determine the values of the demand function parameters in the service of making a point concerning a theoretical claim (e.g., that the demand should be either elastic, or inelastic). The predictions of a theoretical model of demand are assessed based on a fixed dataset, and subjected to a number of tests (e.g., for normality of the noise, model selection, etc.) to winnow the models down to a particular function, which is then usually estimated using a linear regression. Our approach, while taking inspiration from standard economic models of demand, tackles the problem within a simple machine learning framework. We care most about the quality of our short-term predictions of demand response, rather than falsifying the predictions of some theoretical model. Consequently, we simply estimate the characteristics of demand on some window of data, and then predict its behavior on a disjoint time window of data to assess the quality of a particular model, that is, its out of sample fit. In both the statistical and the machine learning approaches to modeling data-generating processes, overfitting is often a major concern. In the case of statistical models, overfitting results in poor estimation of model parameters and standard errors, while in the machine learning framework, it leads to poor out-of-sample fit. However, we restrict our models to fairly rigid functional forms, making overfitting essentially impossible. The Appendix presents a detailed example of model definition and estimation for an isoelastic demand function with a price objective and an L2 loss function, with an explanation of how predictions are done on each prediction window. Retrospective predictive fit The estimating regressions are performed on a series of partially overlapping windows of data for each model, with predictions, used in model performance evaluation, made for some time frame following the estimation window. The predicted demand is then reconstructed for the entire period of interest to assess predictive fit. In the online estimation-prediction-optimization oracle workflow, we use the most recent window alone, but for subsequent analysis we will be using multiple windows. !image (1).jpg Evaluation The performance of different demand models within the prediction windows is assessed using a predictive fit measure, such as R^2, MASE (Mean Absolute Scaled Deviation) or a normalized sum of residuals. The latter measure most closely tracks “visual” fit, particularly in time-aggregated series, but is insensitive to variance. The best performing model is selected to serve as the basis for the protocol welfare optimization program. Demand model selection Any individual model cannot be relied upon to serve as the basis for protocol welfare optimization in all timeframes. This is because, ultimately, aggregate demand is an abstraction over individual behavior of many different participants in the protocol, each with unique risk preferences, token holdings and outside options for deployment of liquidity. Over time, all of these participant characteristics evolve. Additionally, some participants may enter and exit the protocol over time. This implies that having a fixed demand function representing aggregate demand across time is unlikely to correctly reflect the aggregate behavior of the participants. We operationalize the notion of “correctness” by retrospective predictive fit, that is, the degree to which out of sample prediction matches the actually observed behavior in the past. Selecting a model on each of our moving prediction windows dynamically, we can significantly improve upon the performance of any given model. In fact, given the simplicity of our estimation approach, the predictive fit of the best-in-each-prediction-window model is surprisingly good. In the chart below, tracing demand and predicted demand from September 2024 to February 2025 for Aave’s Ethereum-core market, every window’s predicted demand is derived from the best-performing (according to the normalized sum of residuals measure) model for that window. Each window has an estimation timeframe of 7 days and a prediction timeframe of 3 days. !image (2).jpg Protocol welfare model Utilization-constrained protocol revenue as protocol welfare There are several principles that guide our selection of aggregate protocol revenue as a measure of protocol welfare Every user with a healthy position is necessarily a supplier in an over-collateralized protocol Given the inherently risky nature of crypto markets, we can assume that the participants are, at least, risk-neutral User preference is always to make more money from the participation protocol for any fixed quantity of tokens supplied Nevertheless, because crypto markets are punctuated by short periods of extreme volatility and severe price corrections, we have to explicitly guard against supply depletion to preclude even transient insolvencies from damaging public perceptions of the protocol's security. Following the principles and the considerations above, we define platform welfare as utilization-constrained aggregate supplier revenue. In formal terms, we will treat aggregate protocol revenue as the objective of an optimization program, while measures of maximal allowable utilization derived from analyses focused on extreme events are taken as a constraint on the counterfactual demand at the constrained optimal slope1. Protocol optimization program Effectively optimizing protocol welfare requires that the demand response to changes in the interest rate curve closely reflect the characteristics of underlying demand. Otherwise, the optimal interest rate curve parameter settings are optimal in name only, since the response of the borrowers to parameter changes cannot be effectively predicted. We will assume that supply is a fixed quantity at every observation time. In principle, the supply side (which is, as we point out above, also the demand side) should be responsive to the prices we set. While it is possible, in principle, to formulate a more complex problem that considers both demand and supply response, we only consider the former, for tractability. Below, we present a minimal example of a protocol optimization program. Let us introduce some symbolic quantities !image 3.png We can now formulate a candidate optimization program for protocol welfare, normalizing both supply and demand by the total supply for illustration, so that we do not need to consider utilization separately from demand !image 4.png The program aims to maximize revenue from interest accrual, subject to a realized utilization constraint, which requires that the demand response not result in utilization above some threshold for every single datapoint. This is an example of an essential guardrail, which ensures that the optimal solution respects a safeguard that we do not directly encode into the protocol objective. Protocol optimization analysis We perform the optimization of the slope1 parameter with responsive demand, using our prior demand model parameter estimates for this purpose, recomputing the counterfactual demand at each step in the optimization. To help us understand the operation and output of the protocol optimization model, we will examine the evolution of interest rate curves and the impact of relaxing the realized utilization constraint. We illustrate the retrospective operation of our protocol optimization model using 2 months of data for USDC and USDT stablecoins within the Ethereum-core market for Aave V3. The timeframe ranges from 2024-12-24 to 2025-02-23. We let the slope parameter range over [0.01, 0.3], however, we impose a realized utilization constraint that guarantees that at no observation time does the counterfactual utilization demand at the optimum exceed a given threshold. As before, the estimation window size is 7 days and the prediction window size is 3 days. We restrict the model set to the 4 isoelastic demand function models for illustration, as other models can lead to greater variability in optimal slope values on this dataset. Counterfactual Interest Rate Curve Parameters Evolution The final output of a successful simulation model run is a new slope1 parameter, effectively defining a new interest rate curve as a function of utilization, which then evolves over time as the estimation and prediction windows move forward, as seen below for a realized utilization constraint of 91.5%, just slightly below the kink. Over the timeframe under consideration, the total supply of both USDC and USDT is rising, but the demand is declining, leading to declining protocol revenues and low utilization. !image 5.jpg The historical response to this was a gradual lowering of interest rates by decreasing the slope1 parameter, however, utilization continued to decline. Our protocol optimization model would have led to more aggressive downward adjustment. !image 6.jpg Given our demand model estimates, this would have kept utilization close to the specified realized utilization constraint and much higher than what was achieved by the historical policy. !image 7.jpg Higher utilization would have offset the lower interest rates, leading to greater revenue for the protocol. !image 8.jpg Model operation and community feedback Our approach relies on a necessarily reductive economic model of aggregate demand, which cannot incorporate all of the dynamic factors that influence real DeFi markets. The design, and specifically its underlying tooling, is a plug-and-play framework for benchmarking different protocol objectives, demand models and constraints, such as interest rate curve restrictions imposed by utilization incentive programs. This lets us leverage existing community expertise to iterate towards a better simulation model and maximal protocol welfare. Triggers & limits The proposed interest rate oracle leverages Edge Infrastructure to automate interest rate adjustments within set guardrails. Our methodology relies on accurate demand models to produce meaningful parameter recommendations. This means that indicators of demand behavior deviating from the last model used for protocol optimization should trigger a simulation run to refresh the demand models and produce a new parameter recommendation. A measure of deviation in observed demand can be given as !11.png Additional triggers include breaches of specific guardrails, as well as time-triggers for regular updates. Excessive total borrowing deviation trigger - Deviation from total borrowing implies that the underlying demand model requires a refresh - Allows short-term average deviation to be greater than long-term average deviations, as the latter is a stronger indicator of the demand model going stale - Short-term, 10 minutes to 1 hour (highest allowed aggregate deviation) - Medium-term, 1 hour to 24 hours - Long-term, 24 hours to 1 month (lowest allowed aggregate deviation) Utilization exceeding thresholds trigger - Excessive utilization breaches a constraint we explicitly impose on the model - Excessive utilization measures are operationalized as an aggregate function of time and distances from the threshold, evaluated over a defined interval Manual triggers - Scheduled background back-testing and stress-testing simulations raise alerts to notify the risk management team of potentially advantageous updates even in the absence of significant deviations - Observed utilization approaching the realized utilization threshold, an explicit model constraint, raises an alert to notify the risk management team of the need to review demand and interest rate behavior The updates, similarly to those for the supply and borrow cap oracle, are limited in frequency and magnitude. Initially, frequency of regular updates and magnitude limits shall be set to 72 hours and 50 basis points respectively. Appendix Isoelastic demand with a price objective and an L2 loss function Variables !image 9.png Functional form Assume that demand in each period has a constant price elasticity, or isoelastic, form !image|695x76 The elasticity parameter σ determines the % change in demand given a % change in price, at all prices along the curve. The scaling parameter A is the level of fully inelastic demand. The observable quantities, supply and demand, are interpreted to be USD. Price is assumed to be periodic interest rate as a decimal. Note that the choice of price scaling (e.g., periodic rate, APR, or $ cost to borrow a $1) is consequential to elasticity estimates, unless it is multiplicative. Given the assumption of constant price elasticity for the demand, it follows that, in each period, demand, supply and price must satisfy the following equation !image|709x77 The price mapping is assumed to be continuous and monotonically increasing in utilization ut = Dt / St, though in the particular markets belonging to the Aave platform that we will be dealing with, they take a specific piece-wise linear form !image|701x121 Estimation of demand parameters We take a simple machine learning style approach to determining the demand function parameters, numerically solving the following optimization program !image|708x93 The solution minimizes the Euclidean distance between demand implied by the constant elasticity form and observed demand vectors, or the “sum of squared residuals,” as it is usually known in econometrics. Alternatively, the optimization program could be reformulated to minimize distance to the observed price vector !image|703x111 These optimization programs should be equivalent under our assumptions. That is, if we were to observe some data generating process arising from random variation of a flat supply curve, generating the observables (D, P)t, the solutions to the programs would be the same. However, in practice we do not observe such a process. We also encounter issues with numerical optimization algorithms, making the choice of a particular formulation consequential and encouraging the use of multiple models in practice. Prediction of future demand Because of the mechanical linkage between utilization and interest rate, observed demand and prices are positively correlated. However, we are estimating the parameters of a demand curve that is expected to be downward sloping (i.e., “holding everything else equal,” demand should decrease as prices increase). Taking into account the linkage through the interest rate curve, in each time period we can predict future demand by numerically solving the following equation !image|703x66