Aavechan/weETH risk parameters update

diffs/AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426_before_AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426_after.md

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+## Reserve changes
+
+### Reserves altered
+
+#### weETH ([0xCd5fE23C85820F7B72D0926FC9b05b43E359b7ee](https://etherscan.io/address/0xCd5fE23C85820F7B72D0926FC9b05b43E359b7ee))
+
+| description | value before | value after |
+| --- | --- | --- |
+| supplyCap | 48,000 weETH | 84,000 weETH |
+| borrowCap | 3,200 weETH | 29,500 weETH |
+| reserveFactor | 15 % | 45 % |
+| interestRateStrategy | [0x48AF11111764E710fcDcE2750db848C63edab57B](https://etherscan.io/address/0x48AF11111764E710fcDcE2750db848C63edab57B) | [0x0fc12Ad84210695dE8C0D5D8B6f720C37cEaB02f](https://etherscan.io/address/0x0fc12Ad84210695dE8C0D5D8B6f720C37cEaB02f) |
+| optimalUsageRatio | 45 % | 35 % |
+| maxExcessUsageRatio | 55 % | 65 % |
+| interestRate | ![before](/.assets/aa2e8a5322392ad3d4ae80453f4e281a8da627cc.svg) | ![after](/.assets/0a3dc0cae180a27f87076f3f146ac84c1e5dae43.svg) |
+
+## Raw diff
+
+```json
+{
+  "reserves": {
+    "0xCd5fE23C85820F7B72D0926FC9b05b43E359b7ee": {
+      "borrowCap": {
+        "from": 3200,
+        "to": 29500
+      },
+      "interestRateStrategy": {
+        "from": "0x48AF11111764E710fcDcE2750db848C63edab57B",
+        "to": "0x0fc12Ad84210695dE8C0D5D8B6f720C37cEaB02f"
+      },
+      "reserveFactor": {
+        "from": 1500,
+        "to": 4500
+      },
+      "supplyCap": {
+        "from": 48000,
+        "to": 84000
+      }
+    }
+  },
+  "strategies": {
+    "0xCd5fE23C85820F7B72D0926FC9b05b43E359b7ee": {
+      "address": {
+        "from": "0x48AF11111764E710fcDcE2750db848C63edab57B",
+        "to": "0x0fc12Ad84210695dE8C0D5D8B6f720C37cEaB02f"
+      },
+      "maxExcessUsageRatio": {
+        "from": "550000000000000000000000000",
+        "to": "650000000000000000000000000"
+      },
+      "optimalUsageRatio": {
+        "from": "450000000000000000000000000",
+        "to": "350000000000000000000000000"
+      }
+    }
+  }
+}
+```

src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426.sol

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+// SPDX-License-Identifier: MIT
+pragma solidity ^0.8.0;
+
+import {AaveV3EthereumAssets} from 'aave-address-book/AaveV3Ethereum.sol';
+import {AaveV3PayloadEthereum} from 'aave-helpers/v3-config-engine/AaveV3PayloadEthereum.sol';
+import {EngineFlags} from 'aave-helpers/v3-config-engine/EngineFlags.sol';
+import {IAaveV3ConfigEngine} from 'aave-helpers/v3-config-engine/IAaveV3ConfigEngine.sol';
+import {IV3RateStrategyFactory} from 'aave-helpers/v3-config-engine/IV3RateStrategyFactory.sol';
+/**
+ * @title Updating weETH Risk Parameters
+ * @author Aave Chan Initiative
+ * - Snapshot: https://snapshot.org/#/aave.eth/proposal/0xf01d857c392a5d3efcd69725cdee5a5d8e94e5cbe952791d24ff26a26f2b83fa
+ * - Discussion: https://governance.aave.com/t/arfc-updating-weeth-risk-parameters/17402
+ */
+contract AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426 is AaveV3PayloadEthereum {
+  function rateStrategiesUpdates()
+    public
+    pure
+    override
+    returns (IAaveV3ConfigEngine.RateStrategyUpdate[] memory)
+  {
+    IAaveV3ConfigEngine.RateStrategyUpdate[]
+      memory rateStrategies = new IAaveV3ConfigEngine.RateStrategyUpdate[](1);
+    rateStrategies[0] = IAaveV3ConfigEngine.RateStrategyUpdate({
+      asset: AaveV3EthereumAssets.weETH_UNDERLYING,
+      params: IV3RateStrategyFactory.RateStrategyParams({
+        optimalUsageRatio: _bpsToRay(35_00),
+        baseVariableBorrowRate: EngineFlags.KEEP_CURRENT,
+        variableRateSlope1: EngineFlags.KEEP_CURRENT,
+        variableRateSlope2: EngineFlags.KEEP_CURRENT,
+        stableRateSlope1: EngineFlags.KEEP_CURRENT,
+        stableRateSlope2: EngineFlags.KEEP_CURRENT,
+        baseStableRateOffset: EngineFlags.KEEP_CURRENT,
+        stableRateExcessOffset: EngineFlags.KEEP_CURRENT,
+        optimalStableToTotalDebtRatio: EngineFlags.KEEP_CURRENT
+      })
+    });
+
+    return rateStrategies;
+  }
+  function capsUpdates() public pure override returns (IAaveV3ConfigEngine.CapsUpdate[] memory) {
+    IAaveV3ConfigEngine.CapsUpdate[] memory capsUpdate = new IAaveV3ConfigEngine.CapsUpdate[](1);
+
+    capsUpdate[0] = IAaveV3ConfigEngine.CapsUpdate({
+      asset: AaveV3EthereumAssets.weETH_UNDERLYING,
+      supplyCap: 84_000,
+      borrowCap: 29_500
+    });
+
+    return capsUpdate;
+  }
+  function borrowsUpdates()
+    public
+    pure
+    override
+    returns (IAaveV3ConfigEngine.BorrowUpdate[] memory)
+  {
+    IAaveV3ConfigEngine.BorrowUpdate[]
+      memory borrowUpdates = new IAaveV3ConfigEngine.BorrowUpdate[](1);
+
+    borrowUpdates[0] = IAaveV3ConfigEngine.BorrowUpdate({
+      asset: AaveV3EthereumAssets.weETH_UNDERLYING,
+      enabledToBorrow: EngineFlags.KEEP_CURRENT,
+      flashloanable: EngineFlags.KEEP_CURRENT,
+      stableRateModeEnabled: EngineFlags.KEEP_CURRENT,
+      borrowableInIsolation: EngineFlags.KEEP_CURRENT,
+      withSiloedBorrowing: EngineFlags.KEEP_CURRENT,
+      reserveFactor: 45_00
+    });
+
+    return borrowUpdates;
+  }
+}

src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426.t.sol

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+// SPDX-License-Identifier: MIT
+pragma solidity ^0.8.0;
+
+import {AaveV3Ethereum} from 'aave-address-book/AaveV3Ethereum.sol';
+
+import 'forge-std/Test.sol';
+import {ProtocolV3TestBase, ReserveConfig} from 'aave-helpers/ProtocolV3TestBase.sol';
+import {AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426} from './AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426.sol';
+
+/**
+ * @dev Test for AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426
+ * command: make test-contract filter=AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426
+ */
+contract AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426_Test is ProtocolV3TestBase {
+  AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426 internal proposal;
+
+  function setUp() public {
+    vm.createSelectFork(vm.rpcUrl('mainnet'), 19735235);
+    proposal = new AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426();
+  }
+
+  /**
+   * @dev executes the generic test suite including e2e and config snapshots
+   */
+  function test_defaultProposalExecution() public {
+    defaultTest(
+      'AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426',
+      AaveV3Ethereum.POOL,
+      address(proposal)
+    );
+  }
+}

src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/UpdatingWeETHRiskParameters.md

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+---
+title: "Updating weETH Risk Parameters"
+author: "Aave Chan Initiative"
+discussions: "https://governance.aave.com/t/arfc-updating-weeth-risk-parameters/17402"
+snapshot: "https://snapshot.org/#/aave.eth/proposal/0xf01d857c392a5d3efcd69725cdee5a5d8e94e5cbe952791d24ff26a26f2b83fa"
+---
+
+## Simple Summary
+
+This proposal aims to update the risk parameters and interest rate strategy of the weETH asset on the Ethereum pool to boost Aave DAO revenue and encourage collateral adoption.
+
+## Motivation
+
+The successful onboarding of EtherFI into Aave has demonstrated significant demand for weETH usage as both collateral and a borrowing asset, with both initial supply caps reached in minutes and second cap increases filled under similar conditions. To accommodate this demand and facilitate protocol growth, this proposal suggests increasing the supply cap of weETH on the Ethereum pool and the borrow cap at 35% of the new supply cap amount. This proposal also aims at changing the interestRate Strategy to place the optimal ratio at 35% of liquidity.
+
+Expanding borrow capacity will result in a higher collateral yield, which in turn creates a positive flywheel effect on supply and demand. By maintaining the borrow cap at an optimal ratio (35%) of the supply cap, we can balance risk, available liquidity, and LP yield effectively.
+
+We also propose to increase weETH RF to 45% to contribute to Aave DAO revenue.
+
+## Specification
+
+The following changes will be made to the **weETH** asset on Aave EthereumV3:
+
+| Parameters | Current | Recommended |
+| Supply Cap | 48,000 | 84,000 |
+| Borrows Caps | 3,200 | 29,500 |
+| UOpt | 45% | 35% |
+| Reserve Factor | 15% | 45% |
+
+## References
+
+- Implementation: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/main/src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426.sol)
+- Tests: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/main/src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426.t.sol)
+- [Snapshot](https://snapshot.org/#/aave.eth/proposal/0xf01d857c392a5d3efcd69725cdee5a5d8e94e5cbe952791d24ff26a26f2b83fa)
+- [Discussion](https://governance.aave.com/t/arfc-updating-weeth-risk-parameters/17402)
+
+## Copyright
+
+Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).

src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/UpdatingWeETHRiskParameters_20240426.s.sol

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+// SPDX-License-Identifier: MIT
+pragma solidity ^0.8.0;
+
+import {GovV3Helpers, IPayloadsControllerCore, PayloadsControllerUtils} from 'aave-helpers/GovV3Helpers.sol';
+import {EthereumScript} from 'aave-helpers/ScriptUtils.sol';
+import {AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426} from './AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426.sol';
+
+/**
+ * @dev Deploy Ethereum
+ * deploy-command: make deploy-ledger contract=src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/UpdatingWeETHRiskParameters_20240426.s.sol:DeployEthereum chain=mainnet
+ * verify-command: npx catapulta-verify -b broadcast/UpdatingWeETHRiskParameters_20240426.s.sol/1/run-latest.json
+ */
+contract DeployEthereum is EthereumScript {
+  function run() external broadcast {
+    // deploy payloads
+    address payload0 = GovV3Helpers.deployDeterministic(
+      type(AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426).creationCode
+    );
+
+    // compose action
+    IPayloadsControllerCore.ExecutionAction[]
+      memory actions = new IPayloadsControllerCore.ExecutionAction[](1);
+    actions[0] = GovV3Helpers.buildAction(payload0);
+
+    // register action at payloadsController
+    GovV3Helpers.createPayload(actions);
+  }
+}
+
+/**
+ * @dev Create Proposal
+ * command: make deploy-ledger contract=src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/UpdatingWeETHRiskParameters_20240426.s.sol:CreateProposal chain=mainnet
+ */
+contract CreateProposal is EthereumScript {
+  function run() external {
+    // create payloads
+    PayloadsControllerUtils.Payload[] memory payloads = new PayloadsControllerUtils.Payload[](1);
+
+    // compose actions for validation
+    IPayloadsControllerCore.ExecutionAction[]
+      memory actionsEthereum = new IPayloadsControllerCore.ExecutionAction[](1);
+    actionsEthereum[0] = GovV3Helpers.buildAction(
+      type(AaveV3Ethereum_UpdatingWeETHRiskParameters_20240426).creationCode
+    );
+    payloads[0] = GovV3Helpers.buildMainnetPayload(vm, actionsEthereum);
+
+    // create proposal
+    vm.startBroadcast();
+    GovV3Helpers.createProposal(
+      vm,
+      payloads,
+      GovV3Helpers.ipfsHashFile(
+        vm,
+        'src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/UpdatingWeETHRiskParameters.md'
+      )
+    );
+  }
+}

src/20240426_AaveV3Ethereum_UpdatingWeETHRiskParameters/config.ts

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+import {ConfigFile} from '../../generator/types';
+export const config: ConfigFile = {
+  rootOptions: {
+    author: 'Aave Chan Initiative',
+    pools: ['AaveV3Ethereum'],
+    title: 'Updating weETH Risk Parameters',
+    shortName: 'UpdatingWeETHRiskParameters',
+    date: '20240426',
+    discussion: 'https://governance.aave.com/t/arfc-updating-weeth-risk-parameters/17402',
+    snapshot:
+      'https://snapshot.org/#/aave.eth/proposal/0xf01d857c392a5d3efcd69725cdee5a5d8e94e5cbe952791d24ff26a26f2b83fa',
+  },
+  poolOptions: {
+    AaveV3Ethereum: {
+      configs: {
+        RATE_UPDATE_V3: [
+          {
+            asset: 'weETH',
+            params: {
+              optimalUtilizationRate: '35',
+              baseVariableBorrowRate: '',
+              variableRateSlope1: '',
+              variableRateSlope2: '',
+              stableRateSlope1: '',
+              stableRateSlope2: '',
+              baseStableRateOffset: '',
+              stableRateExcessOffset: '',
+              optimalStableToTotalDebtRatio: '',
+            },
+          },
+        ],
+        CAPS_UPDATE: [{asset: 'weETH', supplyCap: '84000', borrowCap: '29500'}],
+        BORROWS_UPDATE: [
+          {
+            enabledToBorrow: 'KEEP_CURRENT',
+            flashloanable: 'KEEP_CURRENT',
+            stableRateModeEnabled: 'KEEP_CURRENT',
+            borrowableInIsolation: 'KEEP_CURRENT',
+            withSiloedBorrowing: 'KEEP_CURRENT',
+            reserveFactor: '45',
+            asset: 'weETH',
+          },
+        ],
+      },
+      cache: {blockNumber: 19735235},
+    },
+  },
+};