[Signal Request] Aave D3M Target Borrow Rate

Governance is free to override any decision at any time.

The MOMC usually takes risk/competition into account for rate setting, so I’m guessing it will be the same for this. These polls are to provide guidance for how the MOMC should pick the values (and/or other PPGs if governance doesn’t like our recommendations).

Not quite sure what you mean by this. Could you elaborate?

Sure, I mean that Maker changes in monetary policy will directly impact Aave DAI borrowing rates (right now they have indirect, market impact). Aave handing Maker the keys to the DAI borrow rate also hands it the responsibility that come with it, and one should be mindful of how differently Aave rate changes ‘imposed by Maker’ could be perceived.

To expand a little on target rate spread, what I find strange is that suppose you match 0% spread with ETH-A borrowing (taking into account the Aave ETH-A lending APY, lending rewards, and borrow rewards). Your net borrow rates for people who supplied something other than WETH to Aave will be downstream of that. And for collateral types that are also available at Maker, DAI borrowing may be cheaper and/or more expensive. I’m really not clear on why singling out ETH-A just because it is the ‘flagship offering’ makes sense.

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This is a fair point. Maybe I could have worded the polling a bit better. This is not meant to be an overly prescriptive design of what to set the rates to. This was to provide a general feel of how the community wants the MOMC to set this. Maybe I shouldn’t have used actual numbers. It’s more like do we want to give them as good a deal as borrowing at Maker, slightly less of a good deal, or a large spread between borrowing rates. What form this translates to with the rates is a little subjective, and we will do our best at the MOMC to not be overly rigid with the polls here. Competitive rates, market conditions and risk will always factor into the MOMC’s decisions.


I’ve closed the poll. It looks like having a small buffer and not taking rewards into account are the clear winners. Since there is nothing to poll against we can skip the on-chain vote. Risk has already proposed initial parameters here: D3M Risk Assessment and there will be an on-chain vote for those parameters.

The MOMC will keep this poll in mind when determining rates in the future.


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