[TEMP CHECK] - Add GHO/USDC/USDT BPT to Safety Module

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A proposal to add a GHO/USDC/USDT Balancer Pool Token to the Aave Safety Module aims to diversify assets and support GHO liquidity, integrating rewards from Balancer and Aura Finance, but faces mixed community reactions due to concerns over asset stability and centralization risks. The community is in the feedback phase, with further discussions needed on asset choices and risk assessment before potentially moving to a TEMP CHECK Snapshot and ARFC stage.

What is this about?

The discussion revolves around a proposal to add a GHO/USDC/USDT Balancer Pool Token (BPT) to the Aave Safety Module (SM). The aim is to diversify the assets within the SM and support GHO liquidity. The proposal includes a new rewards strategy integrating yield from Balancer and Aura Finance, and is contingent on the recovery of the GHO peg. The proposal has been met with various opinions, with some community members supporting it for its potential benefits, while others have raised concerns about the risks and the choice of assets included in the pool.

How is the community reacting?

The community reaction is mixed. Some members, like TokenLogic1 and an unnamed contributor3, are in favor of the proposal, citing benefits such as asset diversification and reduced incentive spend. Others, such as TokenBrice2 and Chippervan9,11, express concerns about the stability of the assets involved and the potential risks. EzR3aL4 is supportive but seeks further clarification on certain points, while Dydymoon5 has raised issues regarding the credit for the work on the proposal and the quality of the current proposal compared to their own previous updates. Fcmartinelli7 and 0xlide8 show support but also highlight the need for careful consideration of the assets involved and the potential for centralization risks.

Why this is positive?

  • Diversification of assets within the Safety Module.
  • Potential for interest accrual for the Aave DAO from GHO debt.
  • Support from the Aura community and positive feedback from Balancer and Aura Finance.
  • The proposal could help bootstrap GHO liquidity and support the GHO peg recovery.

Why this is negative?

  • Concerns about the stability of the assets, especially in light of the recent USDC depeg event.
  • The inclusion of centralized stablecoins like USDC and USDT may impact the censorship resistance of the pool.
  • Additional risks associated with GHO and its LP tokens.
  • Potential centralization of decision-making and lack of response to community input.
  • The need for a proper risk assessment before proceeding.

Next actions

The community is currently in the feedback stage, with the potential to move to a TEMP CHECK Snapshot and then to an ARFC stage if there is consensus. The proposal requires further discussion and clarification, particularly regarding the choice of assets and the risk assessment. There is also a TEMP CHECK for the Safety Module Update Part I, and Part IV of the proposal is being reworked. The DAO may allocate funds to the GHO Liquidity Committee for creating Quests/Bribe campaigns and directing additional yield to SM depositors.

Posted a month ago

Last reply a month ago

Summary updated 12 days ago

Last updated 06/12 00:43