Draft CIP-1 AAVE Liquidity Mining Auto Harvesting Strategy

Motivation

Today, layer2.finance’s connection to AAVE does not harvest AAVE mining rewards. In addition, the manual harvesting of AAVE’s liquidity mining reward is complex and convoluted. Therefore, we propose a new strategy to automatically harvest AAVE’s liquidity mining reward and reinvest to the same strategy pool.

Without l2.finance and our strategy, a regular Aave lender would have to manually interact with the Aave incentives controller, the Aave staking controller, the Uniswap router, and the Aave lending pool contracts separately to compound the gains. One can only imagine how much higher the operational headache and cost it would incur.

We propose to deploy the newly upgraded strategies for all supported stable coins. In the meantime, we will manually harvest the stkAAVE from the V1 strategies and seed the V2 strategies with the gains.

Specification

The strategy first claims the stkAAVE from Aave’s incentive controller contract, it then activates the cooldown period for unstaking, which is currently set to 10 days by Aave. After the cooldown expires, the strategy unstakes the stkAAVE and converts them back to AAVE. It also claims the accrued AAVE interest from staking during the cooldown period. It then sells the AAVE obtained from the into the stablecoins on Uniswap back into the stablecoins and re-invests them into Aave, compounding the gains.

In summary, the sequence of operations is:

Cooldown → Unstake → Claim interest → Sell AAVE into stablecoins → Re-invest into Aave

All of the above operations can be performed by anyone simply calling the harvest() function on the strategy every cooldown period, and the gains are automatically compounded for all layer2.Finance users who have deposited funds into the strategy. All of the complexity is completely hidden from our end users and they don’t even have to perform any action.

Security note

We have reached out to Celer team and did a code review. However, the code is not audited by third-party yet. If approved, we will work with Celer team to get a third-party audit for this strategy at a later date.

What we are asking in return

Nothing, we are a group of developer interested in L2 technology and will make goodwill contribution at first. We will prove our work first before asking anything from the community.

Sentiment Check

  • Support this proposal to add new AAVE auto-harvesting strategy
  • Do not support this proposal to add new AAVE auto-harvesting strategy

0 voters

Appendix
Code is merged by Celer Team here:

6 Likes

This is great work. We have reviewed the code and merged this. We are in support of adding this very much needed strategy to the portfolio!

5 Likes

Great proposals. Can’t wait to see it deploy in production on layer2.finance site!

5 Likes

Celer Join - Vivid Money Bank on Crypto!!

4 Likes

Looks great!can not wait to use this strategy!

2 Likes

finally liquidity mining

2 Likes

This is a very good suggestion

2 Likes

希望能让更多人受益,需要大家一起努力……

2 Likes

great!wonderful!celer

2 Likes