RFC: Aave DAO LTIPP Grant Extension Request

Proposals
1

Abstract

Aave DAO request an extension for its LTIPP Grant, in order to be able to distribute the remaining ARB.

This extension will run from September 2nd 2024 until 2nd November 2024, ensuring Aave DAO has enough time to distribute the allocated ARB without negatively impacting users.

Motivation

Aave DAO was granted a total of 750K ARB, as part of the LTIPP Grant.

Around 375K ARB have been distributed through GHO liquidity Pools, and the remaining were to be distributed through LM on Aave Protocol. These emission programs are in place to be implemented, but need additional time to distribute ARB at reasonable reward rates.

Due to some internal delay in launching GHO Safety Module and GHO Bridge, rewards for LM on Aave Protocol started later than expected, causing a delay in time and not being able to spend the amount allocated for ARB as planned.

Rationale

The currently implemented program has seen amazing success with over 5 million GHO bridged to Arbitrum that represents net new TVL for the ecosystem. Aave DAO plans to continue our incentive matching program with Merit once ARB incentives are fully utilized.

However, due to the deplayed deployment in launching GHO Safety Module and GHO Bridge, rewards for LM on Aave Protocol started later than expected, causing a delay in time and not being able to spend that amount ARB as planned.

As a result, Aave DAO has not utilized the total amount of 375K ARB from the proposal earmarked for GHO deposit incentives and would like to seek an extension to avoid undue miscommunication and missed rewards for Arbitrum users. The distributed ARB will still retain a 3 month schedule from (the delayed) GHO deployment, in line with the initial program goals to do short term incentive programs.

Key Terms

  • Grant an extension on deadline to allocate remaining ARB from LTIPP Grant for Aave DAO to allocate.

Specifications

The extension will utilize the remaining ARB tokens from our original proposal for LM on Aave Protocol.

Steps to Implement

  1. None, it has already been implemented, it needs more time to reach full ARB distribution amounts.

Timeline

  • Start Date: September 2nd 2024
  • End Date: November 2nd 2024

Overall Cost

The extension utilizes the remaining ARB tokens from the originally approved 750K ARB grant. Over the 8 week period, this amount will be fully distributed as per our original LTIP grant.

No additional funds are being requested beyond the original grant allocation.

1 Like
2

Having discussed it in our community, we came to the conclusion that there would be no harm from extending the time for this grant.

However, there are several negative aspects:

  1. At this time, the project has a competitive advantage.
  2. Our committees will not be able to fully verify the evaluation of the LTIPP program as a whole during the Detox period.

We have the same opinion on other applications for extension

3

Formally and fully against any extension. Aave has had months to figure this out - they provided milestones with set weeks and must stick to them. Why would they get special treatment, when every other project stuck to the deadline and will be returning the excess funds?

4

Today alone:

DeltaPrime has returned unused ARB: Arbitrum One Transaction Hash (Txhash) Details | Arbitrum One

Buffer Finance has returned unused ARB: Arbitrum One Transaction Hash (Txhash) Details | Arbitrum One

Gearbox has returned unused ARB: Arbitrum One Transaction Hash (Txhash) Details | Arbitrum One

HOP has returned all unused ARB: Arbitrum One Transaction Hash (Txhash) Details | Arbitrum One

Index Coop returning all unused ARB: Arbitrum One Transaction Hash (Txhash) Details | Arbitrum One

5

Given the unforeseen delays in launching the GHO Safety Module and GHO Bridge, it makes sense to extend the deadline. AAVE has been a cornerstone of the DeFi ecosystem, by granting this extension we’re not just supporting AAVE but also reinforcing the DeFi space on Arbitrum.

6

I believe that tese types of delays are worth to consider an extension.

1 Like
7

We believe GHO holds a lot of potential, and its continued adoption on Arbitrum is important. Recent developments have positioned GHO to become the preferred decentralized stablecoin, especially as DAI transitions to USDS and adds a freeze function. This makes it important for Arbitrum to boost its usage within the network. Therefore, we support the extension.

8

One of the main concerns when drafting the rubric and the requirements for participating in LTIPP was that applicants might rush product/feature launches or skip security measures, such as audits, to meet the application deadline.

Throughout the process, we encountered several applicants in this situation and advised them not to rush their products. If they couldn’t meet the deadlines, they should refrain from applying for the incentives, as LTIPP was a short-term experiment aimed at testing a new incentive program management model, with another plan to follow later.

Then came B.STIP, which unfortunately kind of undermined the experimental nature of LTIPP. A situation that later evolved into what we now call “detox.”

Just as I believed at the time that renewing STIP was a mistake and unfair to both LTIPP applicants who had undergone more scrutiny, and those who failed to pass the council’s more demanding criteria (which differed from STIP’s parameters), I believe that extending the distribution deadlines implies the same unfairness. This affects applicants who met the distribution deadlines or were honest about withdrawing their application due to development delays.

Whatever the reason may be, and I understand the complexities of developing Web3 products, the extension is being requested for failing to meet the promises made in the application form. I’m not saying this shouldn’t happen, and I appreciate that incentives were withheld when it was considered that the product wasn’t ready. However, I believe the experimental nature of LTIPP requires that the established deadlines be respected, allowing the DAO to enter the reflection period we voted for, called “detox.”

For this reason, I will vote against the extension in case this proposal moves to Snapshot

9

While we appreciate Aave and recognize their efforts and successes during the LTIPP, we will be voting against the extension in this scenario.

It is unfortunate, but we believe it is important to abide by the incentives detox. However, we will endeavour to ensure that future programs are designed to overcome the challenges associated with extensions. A well-considered, forward-looking program will address these issues, along with other design considerations that promote long-term success.

We commend the contributions made under the current LTIPP but will maintain our position against any further extensions.

10

We’re voting AGAINST this proposal due to the recent Incentives Detox approval that has halted incentives for all projects. Extending incentives for a single protocol now would create an uneven playing field. Please note that since September 2nd, the majority of LTIPP recipients have started the return of the unused ARB to the Arbitrum DAO. Everyone is invited to do the same.

11

Voting against. Let me first report a previous feedback released for synthetix, and still relevant here.

And I’ll be honest, I am quite said of not seeing the full fledged program about GHO going live in arbitrum, especially after being the LTIPP advisor for AAVE. I can see value + utility for the ecosystem.

My strong advice here, is prepare in the next quarter everything that is needed, from a tech/audit standpoint on the GHO ecosystem. Whatever the next iteration of the program is going to be, I don’t see AAVE not being part of it as one of the main lender, and not being part of it as stablecoin facilitator in the ecosystem, including GHO. I think it will be a no brainer a collaboration between arbitrum and AAVE, also on the diffusion and adoption of gho and increase of stablecoin liquidity in the ecosystem.
So, while I understand this vote can be a frustrating, I am definitely keen to see AAVE here as a constant presence in crypto and in Arbitrum specifically, as well as an important participant to any relevant incenive program we might spin up in future.

1 Like
12

love AAVE and the ACI, but will be voting Against since this extension, at this time, is unfair to the other LTIPP recipients and overrides the detox proposal if it passes.

13

Blockworks Research will be voting AGAINST this proposal on Snapshot.

The difference between this proposal and the Synthetix/Pyth proposals is that those parties had came to the DAO a week prior to the program termination (September 2nd) to ask for additional time, and Synthetix tried to work with a few delegates to talk this through as well. This proposal, along with the Gyroscope proposal, had been submitted at the very last minute, making it more challenging for us to appropriately recognize such timing.

We are saddened to respond in this manner, and we find that Aave is a value-contributor to the entire industry, and we would like to provide similar advice to what others have said, to use the following detox period for preparations.

14

As the largest DeFi lending protocol, AAVE has a large number of users and complex data. In order to ensure security and justice, it is completely understandable to extend the time for distributing rewards, and the proposal does not involve any new budget, so I fully support it!

15

Aave had a delay with GHO and CCIP. If we do not extend the LTIPP a major chance to build a real decentralized stablecoin will be gone. Arbitrum needs anything and everything that can help to grow transactions and drive value. Aave as a leader in lending could help boosting this.
Voting with yes.

16

We will vote “against” this proposal on Snapshot.

We share the same opinion as expressed here.

While we acknowledge the valuable contributions of all the projects requesting extensions so far, our decision from the previous proposal remains unchanged, and we do not expect it to change during the Detox period.

We encourage all projects seeking an extension of their incentives to wait until at least the date suggested by the Detox proposal.

17

Voted FOR on this proposal

Reasoning:
-Incentives Detox makes sense from a “trim the fat” pov. but it makes less sense from a “clean data” or other points of view. Momentum of growth for an ecosystem and core Dapps is much more beneficiial than having clean data about incentives or being purist.

-Stablecoins are the livelihood of every chain. When we analyze chain growth we actually consider stablecoin growth much more strongly than most other metrics.

-AAVE is core DeFi infrastructure that supports every ecosystem its on. AAVE users dont just use AAVE they use AAVE to use other protocols.

We consider AAVE and the GHO program a beneificial use of LTIPP incentive as we consider it core DeFi Infra that benefits the ecosystems its on.

18

Seems reasonable as it allows them more time to distribute the remaining ARB tokens, which were delayed due to technical issues. But how will they ensure future delays won’t impact distribution? What contingency plans are in place for further setbacks?

19

Proposal: In favour. Reason: AAVE is the leading infrastructure protocol in the ETH ecosystem, it has far-reaching and significant significance to the whole defi market, a large number of Defi people have immense and deep trust, the GHO Security Module and GHO Bridge have delayed upgrades and updates, and this time, in their description of the meaningless incentives is meaningless, and I believe that their reasoning is correct. Also look forward to their more explicit effective use, and bring new effects to the arb ecology

20

Agree with the proposal, for the very good reason that the delay in deployment when launching the GHO security module and the GHO bridge, while contrary to the overall liipp’s planning and principles, can continue to be supported in light of aave’s impact on the arb ecology

1 Like