Proposal parameters updated following part of Feedback
Proposal updated to enforce [ARFC-ADDENDUM]
Proposal updated to reflect “Merit is Forever” Budget
Title: [ARFC] Merit - A New Aave-Alignment User Reward System
Date: 2024-02-16
Author: Marc Zeller - Aave-Chan Initiative
Summary
“Merit” proposes a merkle-tree-based periodic airdrop system, designed to reward Aave-aligned user behaviors and enhance protocol competitiveness, with a defined budget for the initial 90-day period.
Motivation
Addressing the competitive DeFi landscape, “Merit” seeks to elevate Aave’s appeal and efficiency through a rewarding mechanism that prioritizes DAO-beneficial actions, distinguishing Aave from competitors employing artificial incentive methods.
Specification
The “Merit” system employs a booster-based model to reward specific user actions with points, dictating the weekly StkAAVE and GHO distribution. The system incorporates merit boosters and diluters to adjust user rewards based on their alignment with Aave’s objectives. The initiative starts with a budget of 2.1M$ in wETH and 2.9M$ in GHO, totaling 5M$ for a 90-day duration, focusing on direct Aave protocol engagement and promoting diversified staking strategies.
Rewarded Actions
Actions that align with Aave’s strategic objectives will be rewarded:
Action |
---|
Borrow wETH |
Borrow GHO |
Hold stkGHO |
Merit boosters
Merit boosters enhance these rewards for specific behaviors:
Behavior | Multiplier description |
---|---|
Second-degree user of aligned protocol | booster for users coming from aligned protocols that favor Aave over other protocols. |
Migrator | Incentive for moving positions to Aave from others protocols |
Diversity Supporter | Rewards for using minority LSTs |
Aavenger | usage of AAVE as collateral |
OG DAO Participant | Booster for early DAO voters or delegates |
Holdooor | Booster for ≥100-day AAVE holders in the past year |
Stakoor | Booster for ≥100-day StkAAVE holders in the past year |
Staker | Bonus for staking AAVE, StkBPT, StkGHO |
Active in Governance | Rewards for voting or delegating to an Aave DAO recognized delegate platform |
Pls note action “hold StkGHO” do not give boost “Staker” if you just Stake GHO for obvious reasons.
Merit Diluters
Merit Diluters will dilute part or all rewards for certain behaviors:
Behavior | Dilution Description/Effect |
---|---|
User of Non-Aligned Protocol | Severe dilution (up to -100%) |
Non-aligned protocol list:
We propose to launch Merit with a single protocol with non-aligned status: Morpho Aave Optimizers V2 & V3
Migration bonus multipliers list:
We propose to apply the “migratooor” Boosters to users leaving the following protocols to join the Aave ecosystem:
- Morpho V2
- Morpho V3
- Morpho Blue
- Spark
Budget and Scope
- Monthly Budget: Defined by Aave Finance service providers, all data will be published publicly after the Merit program ends.
- Total Budget: 20M$ for 365 days.
- Scope: Aave V3 Ethereum.
Synergies
Numerous protocols reached out during the TEMP CHECK period to co-incentive merit; @karpatkey_TokenLogic via Aave Finance are coordinating these efforts, and their incentives are expected to be on top of the Merit budget.
Next Steps
- Refine the proposal details based on community feedback to achieve consensus.
- Conduct a snapshot vote for community sentiment.
- Following a successful snapshot outcome, escalate to the AIP stage for official voting and implementation.
Disclosure
The Aave Chan Initiative independently proposes “Merit,” without external compensation.
Copyright
Copyright and related rights waived under Creative Commons Zero (CC0).