[ARFC] Onboarding wstETH to Aave V3 on Base Network

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The Aave community is considering a proposal to integrate wstETH as a new collateral option with two risk parameter sets, receiving broad support but sparking debate over the appropriate Loan To Value ratio. The next step is a Snapshot vote to gauge community consensus on the proposal.

What is this about?

The discussion revolves around a proposal to onboard wstETH (wrapped staked ETH) from Lido to Aave V3 on the Base Network. The intention is to expand the ecosystem's liquid staking solutions and offer Aave users additional avenues to earn staking rewards on their collateral. The proposal outlines two sets of risk parameters, one aggressive and one conservative, with the aggressive suggesting a Loan To Value (LTV) of 71% and the conservative suggesting an LTV of 67%. The community is in the process of providing feedback, which will be followed by an ARFC snapshot and potentially the development of an AIP if the snapshot is successful.

How is the community reacting?

The community reaction is generally positive towards the listing of wstETH on Aave V3. Notable community members and stakeholders such as 0xkeyrock.eth and organizations like ChaosLabs and Gauntlet have expressed their support. However, there are differing opinions on the risk parameters, with some advocating for a conservative approach due to the current low liquidity of wstETH. Deepcryptodive has argued against lowering the LTV from 71% to 67%, suggesting instead to increase the LTV of cbETH. MarcZeller has moved the proposal forward to the Snapshot stage, indicating readiness for a community vote.

Why this is positive?

  • Diversification of the ecosystem's liquid staking solutions.
  • More options for Aave users to earn staking rewards.
  • Community engagement and support for the proposal.

Why this is negative?

We have not been able to determine whether this will be negative.

Next actions

The next action is the commencement of the Snapshot vote, which MarcZeller announced is set to start the following day. Community members will be able to cast their votes on the proposal.

Posted 22 days ago

Last reply 16 days ago

Summary updated 12 days ago

Last updated 06/12 00:43