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MatthewGraham proposed an extension of the Liquidity Mining Program on Aave V2 Ethereum market for an additional 90 days post AIP-47, with a 30% reduced rate, and introduction of incentives on the Aave ARC market. Two options for incentive allocation were presented, a snapshot vote showed support for the proposal, and it was decided to remove incentives on FEI due to necessary contract upgrades, with a separate AIP covering Liquidity Mining on Aave Arc Market expected in the coming weeks.
The discussion primarily revolves around the proposal by MatthewGraham to extend the Liquidity Mining Program on Aave V2 Ethereum market for an additional 90 days after AIP-47 ends, albeit at a 30% reduced rate1. The proposal also introduces incentives on the Aave ARC market, with 10% of the 30% reduction in incentives on the Aave V2 market being applied to incentivising AUM on the Aave ARC Ethereum market1. The motivation behind this proposal is to continue the tapering of incentives from AIP-47 for another proposed 90-day period, and to start distributing stkAAVE incentives on the Aave ARC market with the aim of growing Total Value Locked (TVL), increasing liquidity, offering attractive borrow rates, increasing protocol income via growing the Reserve Factor, and redistributing governance power towards users of the platform1.
MatthewGraham proposed two options for allocating incentives in the Aave V2 Ethereum and Aave ARC markets. Option 1 involves allocating 10% of the reduction in Aave V2 Ethereum Market stkAAVE incentives, which would be similar to the current allocation strategy in the Aave V2 Ethereum market. This approach is heavily skewed towards USDC and may not accurately represent what is expected over time due to low capital being deposited and zero wBTC in the market1. Option 2 assumes a market size of $250M and a distribution across the assets of 60% USDC, 20% ETH, and 10% each for wBTC and AAVE. This distribution is an assumption and differs from the existing distribution on the Aave V2 Ethereum market. The logic behind this option is to anticipate capital being deposited and then estimating what the vAPR from incentives would equate to1.
A snapshot vote was performed last week, with overwhelming support for the proposal detailed above. A change to be implemented is to remove incentives on FEI. In order to offer stkAAVE incentives on depositing FEI, there is a nontrivial amount of contract upgrades to be performed. With the current Liquidity Mining incentives expiring on the 20th February, MatthewGraham has opted to remove incentives on FEI in order to accommodate submitting the AIP early/mid this week2. Liquidity Mining on Aave Arc Market will be covered by a separate AIP. The AIP will most likely start on Aave Arc Market in the coming weeks. Expectations are that the AIP will be submitted sometime over the next one to two weeks2.
Posted 2 years ago
Last reply 2 years ago
Summary updated 2 months ago
Last updated 03/12 14:23