WETH Borrow Rate Update - Lido Instance

diffs/AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024_before_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024_after.md

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+## Reserve changes
+
+### Reserve altered
+
+#### wstETH ([0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0](https://etherscan.io/address/0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0))
+
+| description | value before | value after |
+| --- | --- | --- |
+| maxVariableBorrowRate | 87.25 % | 87.75 % |
+| baseVariableBorrowRate | 0 % | 0.5 % |
+| interestRate | ![before](https://dash.onaave.com/api/static?variableRateSlope1=22500000000000000000000000&variableRateSlope2=850000000000000000000000000&optimalUsageRatio=800000000000000000000000000&baseVariableBorrowRate=0&maxVariableBorrowRate=872500000000000000000000000) | ![after](https://dash.onaave.com/api/static?variableRateSlope1=22500000000000000000000000&variableRateSlope2=850000000000000000000000000&optimalUsageRatio=800000000000000000000000000&baseVariableBorrowRate=5000000000000000000000000&maxVariableBorrowRate=877500000000000000000000000) |
+
+#### WETH ([0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2](https://etherscan.io/address/0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2))
+
+| description | value before | value after |
+| --- | --- | --- |
+| maxVariableBorrowRate | 87.5 % | 87.75 % |
+| variableRateSlope1 | 2.5 % | 2.75 % |
+| interestRate | ![before](https://dash.onaave.com/api/static?variableRateSlope1=25000000000000000000000000&variableRateSlope2=850000000000000000000000000&optimalUsageRatio=900000000000000000000000000&baseVariableBorrowRate=0&maxVariableBorrowRate=875000000000000000000000000) | ![after](https://dash.onaave.com/api/static?variableRateSlope1=27500000000000000000000000&variableRateSlope2=850000000000000000000000000&optimalUsageRatio=900000000000000000000000000&baseVariableBorrowRate=0&maxVariableBorrowRate=877500000000000000000000000) |
+
+## Emodes changed
+
+### EMode: ETH correlated(id: 1)
+
+| description | value before | value after |
+| --- | --- | --- |
+| eMode.label (unchanged) | ETH correlated | ETH correlated |
+| eMode.ltv (unchanged) | 93.5 % | 93.5 % |
+| eMode.liquidationThreshold (unchanged) | 95.5 % | 95.5 % |
+| eMode.liquidationBonus (unchanged) | 1 % | 1 % |
+| eMode.borrowableBitmap (unchanged) | wstETH, WETH | wstETH, WETH |
+| eMode.collateralBitmap (unchanged) | wstETH, WETH | wstETH, WETH |
+
+
+## Raw diff
+
+```json
+{
+  "strategies": {
+    "0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0": {
+      "baseVariableBorrowRate": {
+        "from": "0",
+        "to": "5000000000000000000000000"
+      },
+      "maxVariableBorrowRate": {
+        "from": "872500000000000000000000000",
+        "to": "877500000000000000000000000"
+      }
+    },
+    "0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2": {
+      "maxVariableBorrowRate": {
+        "from": "875000000000000000000000000",
+        "to": "877500000000000000000000000"
+      },
+      "variableRateSlope1": {
+        "from": "25000000000000000000000000",
+        "to": "27500000000000000000000000"
+      }
+    }
+  }
+}
+```

src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.sol

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+// SPDX-License-Identifier: MIT
+pragma solidity ^0.8.0;
+
+import {AaveV3EthereumLidoAssets} from 'aave-address-book/AaveV3EthereumLido.sol';
+import {AaveV3PayloadEthereumLido} from 'aave-helpers/src/v3-config-engine/AaveV3PayloadEthereumLido.sol';
+import {EngineFlags} from 'aave-v3-origin/contracts/extensions/v3-config-engine/EngineFlags.sol';
+import {IAaveV3ConfigEngine} from 'aave-v3-origin/contracts/extensions/v3-config-engine/IAaveV3ConfigEngine.sol';
+/**
+ * @title wETH Reserve Borrow Rate Update - Lido Instance
+ * @author karpatkey_TokenLogic
+ * - Snapshot: Direct-to-AIP
+ * - Discussion: https://governance.aave.com/t/arfc-weth-wsteth-borrow-rate-updates/19550
+ */
+contract AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024 is
+  AaveV3PayloadEthereumLido
+{
+  function rateStrategiesUpdates()
+    public
+    pure
+    override
+    returns (IAaveV3ConfigEngine.RateStrategyUpdate[] memory)
+  {
+    IAaveV3ConfigEngine.RateStrategyUpdate[]
+      memory rateStrategies = new IAaveV3ConfigEngine.RateStrategyUpdate[](2);
+    rateStrategies[0] = IAaveV3ConfigEngine.RateStrategyUpdate({
+      asset: AaveV3EthereumLidoAssets.WETH_UNDERLYING,
+      params: IAaveV3ConfigEngine.InterestRateInputData({
+        optimalUsageRatio: EngineFlags.KEEP_CURRENT,
+        baseVariableBorrowRate: EngineFlags.KEEP_CURRENT,
+        variableRateSlope1: 2_75,
+        variableRateSlope2: EngineFlags.KEEP_CURRENT
+      })
+    });
+    rateStrategies[1] = IAaveV3ConfigEngine.RateStrategyUpdate({
+      asset: AaveV3EthereumLidoAssets.wstETH_UNDERLYING,
+      params: IAaveV3ConfigEngine.InterestRateInputData({
+        optimalUsageRatio: EngineFlags.KEEP_CURRENT,
+        baseVariableBorrowRate: 50,
+        variableRateSlope1: EngineFlags.KEEP_CURRENT,
+        variableRateSlope2: EngineFlags.KEEP_CURRENT
+      })
+    });
+
+    return rateStrategies;
+  }
+}

src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.t.sol

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+// SPDX-License-Identifier: MIT
+pragma solidity ^0.8.0;
+
+import {AaveV3EthereumLido} from 'aave-address-book/AaveV3EthereumLido.sol';
+
+import 'forge-std/Test.sol';
+import {ProtocolV3TestBase, ReserveConfig} from 'aave-helpers/src/ProtocolV3TestBase.sol';
+import {AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024} from './AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.sol';
+
+/**
+ * @dev Test for AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024
+ * command: FOUNDRY_PROFILE=mainnet forge test --match-path=src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.t.sol -vv
+ */
+contract AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024_Test is
+  ProtocolV3TestBase
+{
+  AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024 internal proposal;
+
+  function setUp() public {
+    vm.createSelectFork(vm.rpcUrl('mainnet'), 21036516);
+    proposal = new AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024();
+  }
+
+  /**
+   * @dev executes the generic test suite including e2e and config snapshots
+   */
+  function test_defaultProposalExecution() public {
+    defaultTest(
+      'AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024',
+      AaveV3EthereumLido.POOL,
+      address(proposal)
+    );
+  }
+}

src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/WETHReserveBorrowRateUpdateLidoInstance.md

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+---
+title: "wstETH and wETH Borrow Rate Update - Lido Instance"
+author: "karpatkey_TokenLogic"
+discussions: "https://governance.aave.com/t/arfc-weth-wsteth-borrow-rate-updates/19550"
+snapshot: "Direct-to-AIP"
+---
+
+## Simple Summary
+
+This AIP when implemented will increase the wETH Slope1 and wstETH Base parameters on the Lido instance of Aave v3.
+
+## Motivation
+
+After onboarding ezETH, the demand for wstETH debt has increased significantly.
+
+This AIP increases the wstETH borrow rate by adjusting the Base parameter from 0 bps to 50bps to better reflect prevailing market conditions.
+
+The wETH borrow rate will be increased by raising Slope1 by 25bps. This is expected to lead to a higher wETH deposit rate and reduce dependency on rewards being emitted to wETH deposits.
+
+## Specification
+
+The Lido instance wETH Slope1 and wstETH Base are to be revised as follows:
+
+| Asset  | Parameter | Current | Proposed | Change |
+| :----: | :-------: | :-----: | :------: | :----: |
+|  wETH  |  Slope1   |  2.50%  |  2.75%   | +0.25% |
+| wstETH |   Base    |  0.00%  |  0.50%   | +0.50% |
+
+## References
+
+- Implementation: [AaveV3EthereumLido](https://github.com/bgd-labs/aave-proposals-v3/blob/main/src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.sol)
+- Tests: [AaveV3EthereumLido](https://github.com/bgd-labs/aave-proposals-v3/blob/main/src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.t.sol)
+- Snapshot: Direct-to-AIP
+- [Discussion](https://governance.aave.com/t/arfc-weth-wsteth-borrow-rate-updates/19550)
+
+## Copyright
+
+Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).

src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/WETHReserveBorrowRateUpdateLidoInstance_20241024.s.sol

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+// SPDX-License-Identifier: MIT
+pragma solidity ^0.8.0;
+
+import {GovV3Helpers, IPayloadsControllerCore, PayloadsControllerUtils} from 'aave-helpers/src/GovV3Helpers.sol';
+import {GovernanceV3Ethereum} from 'aave-address-book/GovernanceV3Ethereum.sol';
+import {EthereumScript} from 'solidity-utils/contracts/utils/ScriptUtils.sol';
+import {AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024} from './AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024.sol';
+
+/**
+ * @dev Deploy Ethereum
+ * deploy-command: make deploy-ledger contract=src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/WETHReserveBorrowRateUpdateLidoInstance_20241024.s.sol:DeployEthereum chain=mainnet
+ * verify-command: FOUNDRY_PROFILE=mainnet npx catapulta-verify -b broadcast/WETHReserveBorrowRateUpdateLidoInstance_20241024.s.sol/1/run-latest.json
+ */
+contract DeployEthereum is EthereumScript {
+  function run() external broadcast {
+    // deploy payloads
+    address payload0 = GovV3Helpers.deployDeterministic(
+      type(AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024).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/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/WETHReserveBorrowRateUpdateLidoInstance_20241024.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(AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance_20241024).creationCode
+    );
+    payloads[0] = GovV3Helpers.buildMainnetPayload(vm, actionsEthereum);
+
+    // create proposal
+    vm.startBroadcast();
+    GovV3Helpers.createProposal(
+      vm,
+      payloads,
+      GovernanceV3Ethereum.VOTING_PORTAL_ETH_POL,
+      GovV3Helpers.ipfsHashFile(
+        vm,
+        'src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/WETHReserveBorrowRateUpdateLidoInstance.md'
+      )
+    );
+  }
+}

src/20241024_AaveV3EthereumLido_WETHReserveBorrowRateUpdateLidoInstance/config.ts

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+import {ConfigFile} from '../../generator/types';
+export const config: ConfigFile = {
+  rootOptions: {
+    pools: ['AaveV3EthereumLido'],
+    title: 'wETH Reserve Borrow Rate Update - Lido Instance',
+    shortName: 'WETHReserveBorrowRateUpdateLidoInstance',
+    date: '20241024',
+    author: 'karpatkey_TokenLogic',
+    discussion: 'https://governance.aave.com/t/arfc-weth-wsteth-borrow-rate-updates/19550',
+    snapshot: 'Direct-to-AIP',
+    votingNetwork: 'POLYGON',
+  },
+  poolOptions: {
+    AaveV3EthereumLido: {
+      configs: {
+        RATE_UPDATE_V3: [
+          {
+            asset: 'WETH',
+            params: {
+              optimalUtilizationRate: '',
+              baseVariableBorrowRate: '',
+              variableRateSlope1: '2.75',
+              variableRateSlope2: '',
+            },
+          },
+          {
+            asset: 'wstETH',
+            params: {
+              optimalUtilizationRate: '',
+              baseVariableBorrowRate: '0.5',
+              variableRateSlope1: '',
+              variableRateSlope2: '',
+            },
+          },
+        ],
+      },
+      cache: {blockNumber: 21036516},
+    },
+  },
+};