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Proposal 112. Aave v2/v3 Polygon - Risk Parameter Updates 2022-10-21


Voting link

https://app.aave.com/governance/proposal/?proposalId=112


Governance forum discussion

https://governance.aave.com/t/arc-price-manipulation-implications-on-aave-october-2022/10262


BGD analysis


Proposal types

🔧 📊 params-update

🔗 🌉 cross-chain execution


Context

This proposal is a risk parameters update by Gauntlet, primarily setting supply and borrow caps in assets listed on Aave v2 and v3 Polygon.


Proposal creation

Transaction: https://etherscan.io/tx/0xce32499bdc4f1c5707e20b29d33627717cebe7fe0fff1282ee93b227123801c9

- id: 112
- creator: 0x683a4f9915d6216f73d6df50151725036bd26c02
- executor: 0xee56e2b3d491590b5b31738cc34d5232f378a8d5
- targets: [0x158a6bc04f0828318821bae797f50b0a1299d45b,0x158a6bc04f0828318821bae797f50b0a1299d45b]
- values: [0,0]
- signatures: [execute(address),execute(address)]
- calldatas: [0x00000000000000000000000003232b5ee80369a88620615f8328beec1884b731,0x0000000000000000000000004393277b02ef3ca293990a772b7160a8c76f2443]
- withDelegatecalls: [true,true]
- startBlock: 15799327
- endBlock: 15818527
- strategy: 0xb7e383ef9b1e9189fc0f71fb30af8aa14377429e
- ipfsHash: 0x854fbd7bfa7e8d059e2b805396e4b92342b49612062ef5e214b170f396fd9cab

Aave Seatbelt report

Ethereum report:

https://github.com/bgd-labs/seatbelt-for-ghosts/blob/main/reports/Aave/0xEC568fffba86c094cf06b22134B23074DFE2252c/112.md

Polygon reports:

As the proposal affects Aave v2 and v3 Polygon, 2 different payloads will get executed. So there are 2 different Aave Seatbelt reports, one per payload.

Aave v2 Polygon

https://github.com/bgd-labs/seatbelt-for-ghosts/blob/main/reports/Aave/0xEC568fffba86c094cf06b22134B23074DFE2252c/112_fx_5_0.md

Aave v3 Polygon

https://github.com/bgd-labs/seatbelt-for-ghosts/blob/main/reports/Aave/0xEC568fffba86c094cf06b22134B23074DFE2252c/112_fx_5_1.md


Technical analysis

Like on every Aave cross-chain proposal, this one follows the procedure defined on https://github.com/bgd-labs/aave-v3-crosschain-listing-template. This means that after execution on Ethereum, the proposal payload (2 in this case) will be queued on the Polygon side of the cross-chain infrastructure and, after 1 day of timelock there, will be open for execution. Assuming that the cross-chain flow works properly, we have verified from a technical perspective that the payloads to be executed after timelock on Polygon do the following:

For Aave v2 Polygon:

  1. Calls configureReserveAsCollateral() on the Aave Pool Configurator for GHST, with the following changes:
    • Liquidation Threshold: 45% -> 40%
    • Disabling borrowing
  2. The payload also introduces a disabling of borrowing for DPI, but this has no effect on Aave v2 Polygon, as DPI is already disabled.

For Aave v3 Polygon:

By calling setSupplyCap() and setBorrowCap() on the Pool Configurator, the following update of caps will be done:

  1. AAVE:
  • Supply cap: 0 AAVE -> 36'820 AAVE
  1. BAL:
  • Supply cap: 0 BAL -> 284'600 BAL
  • Borrow cap: 0 BAL -> 96'798 BAL
  1. CRV:
  • Supply cap: 0 CRV -> 937'700 CRV
  • Borrow cap: 0 CRV -> 303'150 CRV
  1. DAI:
  • Borrow cap: 0 DAI -> 3'860'000 DAI
  1. DPI:
  • Supply cap: 0 DPI -> 1'417 DPI
  • Borrow cap: 0 DPI -> 218 DPI
  1. EUR:
  • Borrow cap: 0 EURS -> 728'520 EURS
  1. GHST:
  • Supply cap: 0 GHST -> 5'876'000 GHST
  • Borrow cap: 0 GHST -> 904'000 GHST
  1. LINK:
  • Supply cap: 0 LINK -> 297'640 LINK
  • Borrow cap: 0 LINK -> 51'029 LINK
  1. MAI:
  • Borrow cap: 0 MAI -> 359'980 MAI
  1. WMATIC:
  • Supply cap: 0 WMATIC -> 32'880'000 WMATIC
  • Borrow cap: 0 WMATIC -> 9'225'000 WMATIC
  1. SUSHI:
  • Supply cap: 0 SUSHI -> 299'320 SUSHI
  • Borrow cap: 0 SUSHI -> 102'484 SUSHI
  1. USDC:
  • Borrow cap: 0 USDC -> 30'680'000 USDC
  1. USDT:
  • Borrow cap: 0 USDT -> 5'060'000 USDT
  1. WBTC:
  • Supply cap: 0 WBTC -> 1'548 WBTC
  • Borrow cap: 0 WBTC -> 155 WBTC
  1. WETH:
  • Supply cap: 0 WETH -> 26'900 WETH
  • Borrow cap: 0 WETH -> 2'690 WETH

BGD validations

✅ The code on the proposal payload corresponds to the proposal specification.

✅ The proposal includes a proper tests suite, checking all necessary post-conditions.

✅ BGD reviewed the payload before the proposal was submitted.

✅ Only one payload used via delegatecall

✅ BGD reviewed the procedure followed to submit the proposal.

✅ With BGD writing the payload, at least another party reviewed it.