[Discussion] Establish ETH Lending Rate Price Floor Through ETH2 Staking

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Ppostie suggests establishing an ETH2 lending rate price floor via trustless ETH2 staking within the AAVE community, potentially enhancing ETH network security and boosting AAVE's TVL, fees, and token utility. They also propose mitigating challenges like the 900 validator per day queue and 9-day exit delay through an "opt-in" for long-term lenders and moving towards a DAO-like management of the validator ecosystem.

The topic of discussion initiated by Ppostie revolves around the potential of establishing an ETH2 lending rate price floor through ETH2 staking in a trustless manner within the AAVE community. The user argues that this could enhance the security of the ETH network, increase the AAVE protocol TVL and fees, and boost the utility of the AAVE token. They also note that AAVE has a competitive edge over projects like Lido Finance as it doesn't require the issuance of a token like STETH that needs to integrate into other DEFI protocols individually1.

Ppostie also brings attention to potential challenges, such as the 900 validator per day queue into and out of the ETH2 validator contract and a 9-day exit delay. They propose that these issues could be mitigated by an "opt-in" for longer-term lenders, akin to unstaking AAVE from the safety module1. They further suggest that AAVE's community and governance should consider moving towards an active trustless DAO-like management of the validator ecosystem, which could potentially enhance the community's contribution and value to the protocol1.

In conclusion, Ppostie proposes that by merging high ETH lending rates with low stable coin borrow rates, AAVE could significantly expand its market share1. They encourage further thoughts and discussion on this proposal, indicating that the topic is open for further exploration and debate.

Posted 3 years ago

Last reply 3 years ago

Summary updated 2 months ago

Last updated 06/12 00:44