This proposal points out the need to deprecate Aave v1 support due to favorable timing and market conditions. The initiative consists of 9 actions, 6 used for Best-Yield pools and 3 for Risk-Adjusted ones.
After the publication of “Aave Protocol V1 → V2 migration tool and transition plan” in January, the Idle community discussed Aave v2 wrapper integration in February. The Governance implemented it in idleDAI, idleUSDC, idleUSDT, idleSUSD, idleTUSD, idleWBTC, and idleWETH Best-Yield pools via IIP-5.
The three-phase initiative included:
Fund migration from V1 to v2;
Deprecation of Aave v1 support with an on-chain proposal
On the Aave Governance side, today 98% of the liquidity moved to V2.
Aave V1 only manages $346m and that version is no longer available on the Aave website as a reference market (there is just a placeholder in the menu).
With the stkAAVE incentivization program on V2 and the progressive liquidity migration, V1 no longer provides juicy APYs.
Here below we report, as an example, the protocol allocations on idleDAI and idleUSDC over the last 3 months:
With the current scenario and the upcoming Aave V1 deprecation, we have the chance to remove V1 from Idle pools.
As the protocol has not allocated funds on V1 for weeks, the execution of this proposal would proceed smoothly and safely.
Even in the case of a potential allocation, there is still enough liquidity on that market to successfully redeem the assets with low risks.
To complete the migration, the Governance has to execute the following actions:
Remove Aave V1 wrapper from idleDAI, idleUSDC, idleUSDT, idleSUSD, idleTUSD, idleWBTC Best-Yield pools (6 actions);
Remove Aave V1 wrapper from idleDAI, idleUSDC, idleUSDT, RIsk-Adjusted pools (3 actions).
Due to the number of required actions (9), the proposal can be fully executed through one on-chain IIP.
Gauge community sentiment and see if there are doubts or issues within the Governance
Develop the technical implementation (task assigned to Dev League)
Broadcast and execute IIP-11
The thread is open for comments regarding this implementation.
The topic has been widely discussed by the community during V2 development and integration, so the proposal will move forward without a Temperature Check if no clear issues arise.
If there are no objections, in some days the Leagues will move forward with the technical aspects and, after a few weeks, they will publish the final IIP.