Aave Improvement Proposals (AIPs) describe standards for the Aave Protocol, including core protocol specifications, client APIs, and contract standards.

AIP 27: Lower Reserve Factor for AMPL

Author: Ahmed Naguib Aly , Nithin Ottilingam (@nithinkrishna), Brandon Iles (@brandoniles)Status: Proposed - Discussions- RawCreated: July 27, 2021

Simple Summary

This is a sibling proposal to AIP-26 and proposes lowering the AMPL reserve factor from 20% to 10%.

Motivation

Following API-12, AMPL borrowing & depositing went live on the AAVE v2 market [date=2021-07-24 time=20:22:00 timezone=“UTC”]. Since then, there has been a near 100% utilization rate of deposited assets.

The reserveFactor allows the FeeCollector smart contract to receive part of the interest paid by takers of liquidity. Each asset on Aave has its own reserveFactor.

AIP-26 raises the maximum borrowing rate for AMPL and would result in more fees coming into the system. This AIP proposes (in tandem) lowering the AMPL reserve factor from 20% to 10%. This shares more of the revenue with AMPL suppliers to further incentivize deposits.

Relevant Links

Implementation

call setReserveFactor(0xd46ba6d942050d489dbd938a2c909a5d5039a161, 1000)

On the lending pool configurator contract

https://etherscan.io/address/0x311bb771e4f8952e6da169b425e7e92d6ac45756

Copyright

Copyright and related rights waived via CC0.

Aave Improvement Proposals (AIPs) describe standards for the Aave Protocol, including core protocol specifications, client APIs, and contract standards.

Learn about the process here.