[TEMP CHECK] AAVE Treasury Proposal for RWA Allocation with Maple Finance

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Aave is considering investing 1M USDC into Maple Finance's Cash Management pool to diversify into Real World Assets and gain stable yields, despite mixed community reactions and concerns over risk and fees. The proposal will go to a vote, with Maple open to adjusting fee structures and collaborating on Aave's treasury management strategy.

What is this about?

The discussion is centered on a proposal by Maple_direct1 for Aave's Treasury to allocate 1M USDC to Maple Finance's Cash Management pool. The goal is to diversify Aave's investments into Real World Assets (RWA) and leverage Maple Finance's pool, which has a net APY of around 4.8% backed by US Treasury bills and overnight repos. This initiative is part of Aave's strategy to broaden its investment scope to include off-chain markets, with RWA collateral to support its growth. The process would require legal structuring to access KYC permissioned DeFi pools, with Maple Direct facilitating Aave's entry.

How is the community reacting?

The community has mixed reactions to the proposal. DeFiConnoisseur2 and PennBlockchain10 are in favor, highlighting the benefits of diversifying AAVE's treasury and the potential for stable returns during bear markets. Conversely, EzR3aL3 expresses concerns about default risks and fluctuating interest rates, questioning the "risk-free" label. MarcZeller4 from Aave DAO suggests ACI is inclined to vote against the proposal due to Maple's product underperformance compared to Aave's yields. 0xkeyrock.eth5 criticizes the proposal for its higher fees compared to another proposal and initially opposes it. However, after acknowledging a mistake in evaluating a previous proposal, 0xkeyrock.eth12 proposes considering a proposal involving Karpatkey_TokenLogic as a financial services provider. Maple_direct6,7,8 responds to concerns by highlighting the lower volatility and consistent yield of their pool and expresses willingness to adapt their offerings. Stableghost14 supports MarcZeller's points and suggests Maple could facilitate GHO, potentially leading to a more synergistic and profitable integration.

Why this is positive?

  • Diversification into Real World Assets could reduce Aave's exposure to crypto market volatility.
  • Maple's Cash Management Pool offers a stable yield backed by US Treasury bills, acting as a hedge against DeFi market fluctuations.
  • The pool provides daily liquidity and manages interest rate risk with short asset maturity.
  • Maple Finance is a regulated entity with a proven track record, potentially offering a reliable investment option.

Why this is negative?

  • There are concerns about the "risk-free" claim and the potential for defaults and the impact of changing interest rates.
  • Maple's cash management product is perceived to have lower performance compared to Aave's own protocol yields.
  • The fee structure proposed by Maple is higher than that of a competing proposal, raising cost-effectiveness questions.
  • The ongoing debate about whether the benefits provided by Maple Finance justify the fees they charge.

Next actions

The proposal is set to proceed to an off-chain snapshot vote within 7-14 days, followed by an on-chain AIP. Community members are encouraged to continue the discussion and prepare for the vote. Maple_direct has indicated Maple's openness to considering alternative fee structures in collaboration with Aave and is rolling out new features to improve the Maple Cash Management product. They are also open to working with Karpatkey, Aave Companies, and other partners for a comprehensive treasury management strategy that aligns with the DAO's financial interests. Maple is flexible about working within the framework of a Cayman Foundation if the DAO is setting one up, which could streamline the onboarding process and save on costs and time13.

Posted 13 days ago

Last reply 3 days ago

Summary updated 3 days ago

Last updated 03/12 08:00