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GHO Borrow Rate Update #271

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## Reserve changes

### Reserves altered

#### GHO ([0x40D16FC0246aD3160Ccc09B8D0D3A2cD28aE6C2f](https://etherscan.io/address/0x40D16FC0246aD3160Ccc09B8D0D3A2cD28aE6C2f))

| description | value before | value after |
| --- | --- | --- |
| interestRateStrategy | [0x2f6390Ef66B8564C715aF6834361621dda38d816](https://etherscan.io/address/0x2f6390Ef66B8564C715aF6834361621dda38d816) | [0x7123138CB4891E9dA927492ce29c8a2eC4aB433A](https://etherscan.io/address/0x7123138CB4891E9dA927492ce29c8a2eC4aB433A) |
| baseVariableBorrowRate | 7.92 % | 13 % |
| interestRate | ![before](/.assets/8f4bd9d9c75dc060033b9ce1f2681ecb81e1b33f.svg) | ![after](/.assets/233ba99310cd56d74318156592f9f533d1e81dde.svg) |

## Raw diff

```json
{
"reserves": {
"0x40D16FC0246aD3160Ccc09B8D0D3A2cD28aE6C2f": {
"interestRateStrategy": {
"from": "0x2f6390Ef66B8564C715aF6834361621dda38d816",
"to": "0x7123138CB4891E9dA927492ce29c8a2eC4aB433A"
}
}
},
"strategies": {
"0x40D16FC0246aD3160Ccc09B8D0D3A2cD28aE6C2f": {
"address": {
"from": "0x2f6390Ef66B8564C715aF6834361621dda38d816",
"to": "0x7123138CB4891E9dA927492ce29c8a2eC4aB433A"
},
"baseVariableBorrowRate": {
"from": "79200000000000000000000000",
"to": "130000000000000000000000000"
}
}
}
}
```
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// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

import {AaveV3Ethereum, AaveV3EthereumAssets} from 'aave-address-book/AaveV3Ethereum.sol';
import {IProposalGenericExecutor} from 'aave-helpers/interfaces/IProposalGenericExecutor.sol';

/**
* @title GHO Borrow Rate Update
* @author karpatkey_TokenLogic & ACI & ChaosLabs
* - Snapshot: https://snapshot.org/#/aave.eth/proposal/0xc26346b891974968c6fa1745b2cfa869d2d0e5875e9fc2bd661167ae19314c6b
* - Discussion: https://governance.aave.com/t/arfc-gho-stewards-borrow-rate-update/16956
*/
contract AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324 is IProposalGenericExecutor {
address internal immutable INTEREST_RATE_STRATEGY;

constructor(address interestRateStrategy) {
INTEREST_RATE_STRATEGY = interestRateStrategy;
}

function execute() external {
AaveV3Ethereum.POOL_CONFIGURATOR.setReserveInterestRateStrategyAddress(
AaveV3EthereumAssets.GHO_UNDERLYING,
INTEREST_RATE_STRATEGY
);
}
}
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// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

import {AaveV3Ethereum} from 'aave-address-book/AaveV3Ethereum.sol';
import {ProtocolV3TestBase} from 'aave-helpers/ProtocolV3TestBase.sol';
import {GovV3Helpers, IPayloadsControllerCore, PayloadsControllerUtils} from 'aave-helpers/GovV3Helpers.sol';

import {AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324} from './AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324.sol';
import {GhoInterestRateStrategy} from './GhoInterestRateStrategy.sol';

/**
* @dev Test for AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324
* command: make test-contract filter=AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324
*/
contract AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324_Test is ProtocolV3TestBase {
AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324 internal proposal;
GhoInterestRateStrategy internal strategy;

function setUp() public {
vm.createSelectFork(vm.rpcUrl('mainnet'), 19511307);
strategy = GhoInterestRateStrategy(
GovV3Helpers.deployDeterministic(type(GhoInterestRateStrategy).creationCode)
);

proposal = AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324(
GovV3Helpers.deployDeterministic(
type(AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324).creationCode,
abi.encode(
GovV3Helpers.predictDeterministicAddress(type(GhoInterestRateStrategy).creationCode)
)
)
);
}

/**
* @dev executes the generic test suite including e2e and config snapshots
*/
function test_defaultProposalExecution() public {
defaultTest(
'AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324',
AaveV3Ethereum.POOL,
address(proposal)
);
}
}
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---
title: "GHO Stewards + Borrow Rate Update"
author: "karpatkey_TokenLogic ACI ChaosLabs"
discussions: "https://governance.aave.com/t/arfc-gho-stewards-borrow-rate-update/16956"
snapshot: "https://snapshot.org/#/aave.eth/proposal/0xc26346b891974968c6fa1745b2cfa869d2d0e5875e9fc2bd661167ae19314c6b"
---

## Simple Summary

In response to recent market events, this AIP increases the GHO Borrow Rate to 13.00%.

## Motivation

In response to recent stable coin Borrow Rates increasing and Maker DAO's recently proposed changes, this AIP amends the current GHO Interest Rate strategy.

This AIP is expected to enable GHO to continue growing whilst maintaining peg stability. Upon implementation the Borrow Rate arbitrage opportunity with be meaningfully reduced.

## Specification

| Description | Current (%) | Proposed (%) |
| -------------------------- | ----------- | ------------------ |
| Non Discounted Borrow Rate | 7.48% | 13.00% |
| stkAAVE Discount | 30.00% | 30.00% (no change) |
| Discounted Borrow Rate | 5.24% | 9.10% |

## References

- Implementation: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/main/src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324.sol)
- Tests: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/main/src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324.t.sol)
- [Snapshot](https://snapshot.org/#/aave.eth/proposal/0xc26346b891974968c6fa1745b2cfa869d2d0e5875e9fc2bd661167ae19314c6b)
- [Discussion](https://governance.aave.com/t/arfc-gho-stewards-borrow-rate-update/16956)

## Copyright

Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).
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// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

import {GovV3Helpers, IPayloadsControllerCore, PayloadsControllerUtils} from 'aave-helpers/GovV3Helpers.sol';
import {EthereumScript} from 'aave-helpers/ScriptUtils.sol';

import {AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324} from './AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324.sol';
import {GhoInterestRateStrategy} from './GhoInterestRateStrategy.sol';

/**
* @dev Deploy InterestRateStrategy
* deploy-command: make deploy-ledger contract=src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/GHOStewardsBorrowRateUpdate_20240324.s.sol:DeployInterestRateStrategy chain=mainnet
* verify-command: npx catapulta-verify -b broadcast/GHOStewardsBorrowRateUpdate_20240324.s.sol/1/run-latest.json
*/
contract DeployInterestRateStrategy is EthereumScript {
function run() external broadcast {
// deploy ir
GovV3Helpers.deployDeterministic(type(GhoInterestRateStrategy).creationCode);
}
}

/**
* @dev Deploy Ethereum
* deploy-command: make deploy-ledger contract=src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/GHOStewardsBorrowRateUpdate_20240324.s.sol:DeployEthereum chain=mainnet
* verify-command: npx catapulta-verify -b broadcast/GHOStewardsBorrowRateUpdate_20240324.s.sol/1/run-latest.json
*/
contract DeployEthereum is EthereumScript {
function run() external broadcast {
// deploy payloads
address payload0 = GovV3Helpers.deployDeterministic(
type(AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324).creationCode,
abi.encode(
GovV3Helpers.predictDeterministicAddress(type(GhoInterestRateStrategy).creationCode)
)
);

// compose action
IPayloadsControllerCore.ExecutionAction[]
memory actions = new IPayloadsControllerCore.ExecutionAction[](1);
actions[0] = GovV3Helpers.buildAction(payload0);

// register action at payloadsController
GovV3Helpers.createPayload(actions);
}
}

/**
* @dev Create Proposal
* command: make deploy-ledger contract=src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/GHOStewardsBorrowRateUpdate_20240324.s.sol:CreateProposal chain=mainnet
*/
contract CreateProposal is EthereumScript {
function run() external {
address strategy = GovV3Helpers.predictDeterministicAddress(
type(GhoInterestRateStrategy).creationCode
);
// create payloads
PayloadsControllerUtils.Payload[] memory payloads = new PayloadsControllerUtils.Payload[](1);

// compose actions for validation
IPayloadsControllerCore.ExecutionAction[]
memory actionsEthereum = new IPayloadsControllerCore.ExecutionAction[](1);
actionsEthereum[0] = GovV3Helpers.buildAction(
type(AaveV3Ethereum_GHOStewardsBorrowRateUpdate_20240324).creationCode,
abi.encode(strategy)
);
payloads[0] = GovV3Helpers.buildMainnetPayload(vm, actionsEthereum);

// create proposal
vm.startBroadcast();
GovV3Helpers.createProposal(
vm,
payloads,
GovV3Helpers.ipfsHashFile(
vm,
'src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/GHOStewardsBorrowRateUpdate.md'
)
);
}
}
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// SPDX-License-Identifier: MIT
pragma solidity ^0.8.10;

import {DataTypes} from 'aave-v3-core/contracts/protocol/libraries/types/DataTypes.sol';
import {IDefaultInterestRateStrategy} from 'aave-v3-core/contracts/interfaces/IDefaultInterestRateStrategy.sol';
import {IReserveInterestRateStrategy} from 'aave-v3-core/contracts/interfaces/IReserveInterestRateStrategy.sol';
import {IPoolAddressesProvider} from 'aave-v3-core/contracts/interfaces/IPoolAddressesProvider.sol';
import {AaveV3Ethereum, AaveV3EthereumAssets} from 'aave-address-book/AaveV3Ethereum.sol';

/**
* @title GhoInterestRateStrategy
* @author Aave
* @notice Implements the calculation of GHO interest rates, which defines a fixed variable borrow rate.
* @dev The variable borrow interest rate is fixed at deployment time. The rest of parameters are zeroed.
*/
contract GhoInterestRateStrategy is IDefaultInterestRateStrategy {
/// @inheritdoc IDefaultInterestRateStrategy
uint256 public constant OPTIMAL_USAGE_RATIO = 0;

/// @inheritdoc IDefaultInterestRateStrategy
uint256 public constant OPTIMAL_STABLE_TO_TOTAL_DEBT_RATIO = 0;

/// @inheritdoc IDefaultInterestRateStrategy
uint256 public constant MAX_EXCESS_USAGE_RATIO = 0;

/// @inheritdoc IDefaultInterestRateStrategy
uint256 public constant MAX_EXCESS_STABLE_TO_TOTAL_DEBT_RATIO = 0;

/// @inheritdoc IDefaultInterestRateStrategy
IPoolAddressesProvider public constant ADDRESSES_PROVIDER =
AaveV3Ethereum.POOL_ADDRESSES_PROVIDER;

// Base variable borrow rate when usage rate = 0. Expressed in ray
uint256 internal immutable _baseVariableBorrowRate = 130000000000000000000000000; // 13.00% in ray format

/// @inheritdoc IDefaultInterestRateStrategy
function getVariableRateSlope1() external pure returns (uint256) {
return 0;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getVariableRateSlope2() external pure returns (uint256) {
return 0;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getStableRateSlope1() external pure returns (uint256) {
return 0;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getStableRateSlope2() external pure returns (uint256) {
return 0;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getStableRateExcessOffset() external pure returns (uint256) {
return 0;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getBaseStableBorrowRate() public pure returns (uint256) {
return 0;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getBaseVariableBorrowRate() external view override returns (uint256) {
return _baseVariableBorrowRate;
}

/// @inheritdoc IDefaultInterestRateStrategy
function getMaxVariableBorrowRate() external view override returns (uint256) {
return _baseVariableBorrowRate;
}

/// @inheritdoc IReserveInterestRateStrategy
function calculateInterestRates(
DataTypes.CalculateInterestRatesParams memory
) public view override returns (uint256, uint256, uint256) {
return (0, 0, _baseVariableBorrowRate);
}
}
14 changes: 14 additions & 0 deletions src/20240324_AaveV3Ethereum_GHOStewardsBorrowRateUpdate/config.ts
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import {ConfigFile} from '../../generator/types';
export const config: ConfigFile = {
rootOptions: {
pools: ['AaveV3Ethereum'],
title: 'GHO Stewards + Borrow Rate Update',
shortName: 'GHOStewardsBorrowRateUpdate',
date: '20240324',
author: 'karpatkey_TokenLogic ACI ChaosLabs',
discussion: 'https://governance.aave.com/t/arfc-gho-stewards-borrow-rate-update/16956',
snapshot:
'https://snapshot.org/#/aave.eth/proposal/0xc26346b891974968c6fa1745b2cfa869d2d0e5875e9fc2bd661167ae19314c6b',
},
poolOptions: {AaveV3Ethereum: {configs: {}, cache: {blockNumber: 19508206}}},
};
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