aUSDC MAKER IMPROVEMENT PROPOSAL (MIP6 Collateral Onboarding)
1. Who is the interested party for this collateral application?
Maker Community Member @ElProgreso on behalf of the Maker Community
2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.
aUSDC Token is an interest-bearing derivative tokens that are minted and burned upon deposit (called from
LendingPool https://bit.ly/3bXogNQ) and redeem(called from the
aToken contract https://bit.ly/33xOoek).
aUSDC value is pegged to the value of the corresponding deposited asset at a 1:1 ratio, and can be safely stored, transferred, or traded. All interest collected by the aUSDC reserves are distributed to aUSDC holders directly by continuously increasing their wallet balance.
The source code for aTokens can be found here: https://bit.ly/32wdzPq
3. Provide a brief history of the project.
aUSDC mainnet was launched in January, 2020. Headquartered in London, Aave protocol is a decentralized, open-source, and non-custodial money market protocol. Depositors earn interest by providing liquidity to lending pools, while borrowers can obtain loans by tapping into these pools in both an overcollateralized (perpetually) or undercollateralized (one-block liquidity) fashion. At the start of 2020, Aave had a Total Value Locked ( TVL ) of 4.1 Million USD. Today Aave has over 1 Billion USD in TVL.
4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.
5. Link any available audits of the project. Both procedural and smart contract focused audits.
Aave Governance DAO Audit: https://diligence.consensys.net/audits/2020/08/aave-governance-dao/
Aave CPM Price Provider Audit: https://diligence.consensys.net/audits/2020/05/aave-cpm-price-provider/
Aave Balancer and Uniswap v2 Price Providers Audit: https://diligence.consensys.net/audits/2020/08/aave-balancer-and-uniswap-v2-price-providers/
Aave Protocol Audit: https://blog.openzeppelin.com/aave-protocol-audit/
6. Link to any active communities relating to your project.
7. How is the applying collateral type currently used?
Whenever USDC Tokens are deposited on Aave, either as a lender, or as collateral when borrowing, the user is given an equivalent amount in aUSDC. For example, if you deposited 100 USDC into Aave, you would be given 100 aUSDC. The function of these tokens is to allow you to earn interest. Every second, a small fraction of corresponding aUSDC is added to your Ethereum wallet in accordance with the APR interest rate for your asset. These can then be exchanged for the equivalent amount of the underlying asset in Aave at the time of withdrawal.
8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?
No organization bears responsibility for the collateral and users bear the responsibility of their collateral and use of the protocol
9. Where does exchange for the asset occur?
On decentralized exchanges
10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.
11. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.
12. (Optional) List any possible oracle data sources for the proposed Collateral type.
“5.1 Review Chainlink’s performance at times of price volatility
In order to understand the risk of the Chainlink oracle deviating significantly, it would be helpful to compare historical prices on Chainlink when prices are moving rapidly, and see what the largest historical delta is compared to the live price on a large exchange.
Update: The Aave team has evaluated the behavior of the price provider and believes that in the worst case, the CPMPriceProvider’s performance will match that of the oracle for the underlying currency (ex. Chainlink’s DAI/ETH aggregrator) in the UNI pair.”