This on-chain purchase completes the two-part process for acquiring a total of 300,000 BAL after an initial 200,000 BAL was acquired via the token swap in AIP-87.

The 100,000 BAL acquisition further extends the DAO's holding to be used for supporting the growth of the Aave ecosystem. There are numerous opportunities within the Aave ecosystem to utilize veBAL. BAL emissions are expected to lead to higher TVL and attract new users/use cases to Aave which will lead to additional revenue generation or, alternatively, reduce the AAVE emissions via the Safety Module.

Llama proposed assigning the Emission_Admin role for the LDO, stMATIC, MaticX, and SD tokens on the Polygon v3 deployment.

This proposal enabled rewards on the Polygon v3 market, allowing Lido, Stader, and Polygon Foundation to incentivize tokens such as stMATIC, MaticX, and wMATIC. We expect this proposal to increase TVL on Polygon v3 and grow Aave's revenue.

In the medium-term, we expect these proposals to drive significant TVL and revenue to Aave, though these rewards began around the end of Q1 2023.

Llama proposed amending the ETH interest rate parameters on the Aave Ethereum v2 and v3 Liquidity Pool.

The goal of this proposal was to increase revenue and borrow demand for wETH on Aave v2 (and Aave v3, once launched) by facilitating the ETH/stETH looped recursive strategy. Prior to Llama's proposal, the recursive strategy did not break even prior to reaching the Uoptimal utilization within the Reserve, leading to lower borrow demand. Prior to this proposal, due the implementation of AIP-68, Aave DAO is earning less revenue from the ETH Reserve post-merge despite utilization within the Reserve increasing significantly over that time.

Llama proposed acquiring CRV with aUSDC from the Collector Contract for the purpose of repaying the excess debt in the CRV Reserve on the Ethereum v2 Liquidity Pool.

Llama proposed amending the interest rate parameters, SupplyCap, and BorrowCap for wMATIC on the Aave Polygon v3 Liquidity Pool.

At the previous borrow rate, the maximized-yield strategy of looping stMATIC/wMATIC was uprofitable without incentives. wMATIC's reserve utilization was low (38.2%) due to high borrowing costs. This proposal reduced borrowing cost of wMATIC. We expected this proposal to lead to increased wMATIC borrow demand and increased revenue to Aave.

Llama proposed amending BAL interest rate parameters on the Aave Ethereum v2, Polygon v2, and Polygon v3 Liquidity Pools.

This proposal sought to increase capital effiency of BAL pools, increasing Aave's BAL revenue. As Ethereum v2 and Polygon v2 are currently frozen, this proposal was most effective Polygon v3.

This proposal enabled Lido to distribute LDO rewards across Aave v3 Ethereum, Arbitrum, and Optimism Liquidity Pools.

We expect this proposal to attract TVL to stETH and wstETH pools and subsequently increase revenue.

After Llama's AIP-131 to update the wETH interest rate parameters on Ethereum v2, Aave saw improved overall total revenue. However, borrow demand reduced from 515k to 424k from December 18, 2022 to January 15, 2023. Our analysis indicated that Slope1 was the most likely cause of this reduced wETH borrow demand.

We proposed aligning the wETH interest rate parameters across the Aave v2 and v3 Ethereum Liquidity Pools, with the goal of offsetting the declining revenue trend via a higher utilization of the v2 wETH market. To avoid double counting our impact with AIP-131, we've excluded this data from our aggregate impact figures but provide charts below for completeness.

Llama proposed listing wstETH to Aave v3's Arbitrum market, facilitating the aArbWETH/wstETH loop strategy.

The analogous stETH/wETH rewards-maximizing loop on Aave v2 Ethereum is the main source of borrowing demand for wETH and the wETH reserve generates a material portion of Aave's revenue. With this proposal, our main goals were to increase revenue and to enable wstETH deposits, allowing users to borrow wETH and enter the rewards-maximizing loop.

Llama proposed upgrading the MaticX Reserve on Polygon to facilitate an expansion of the MaticX/wMATIC loop strategy.

Specifically, this proposal increased the Supply Cap for MaticX, enabling the recursive MaticX/wMATIC strategy to grow beyond the existing constraints. Along with a reasonable Borrow Cap and SD rewards from Stader, this proposal sought to increase MaticX revenue as well as deposits and borrow for MaticX and wMATIC.

Llama proposed listing CRV to Aave V3's Ethereum market.

CRV is a strategic asset to Aave and any CRV earned from the pool can be used by the DAO to support bootstrapping the adoption of GHO, StakedATokens, and in the long term, perhaps help incentivize the Safety Module. This proposal sought to generate CRV-denominated revenue, increasing Aave's governance power at Curve.

Llama proposed increasing the stMATIC Supply Cap on Polygon to facilitate an expansion of the stMATIC/wMATIC loop strategy.

This proposal sought to increase deposits for stMATIC, allowing more users to enter the stMATIC/wMATIC loop, ultimately increasing revenue for Aave.

Llama proposed updating the CRV interest rate parameters on the Aave Ethereum v2, Polygon v2, and Polygon v3 Liquidity Pools.

This proposal sought to increase capital effiency of CRV pools, increasing Aave's revenue. As Ethereum v2 and Polygon v2 are currently frozen, this proposal was most effective Polygon v3.

With utilization of the MaticX pool reaching 99%, Llama proposed increasing the MaticX Supply Cap, allowing Stader Labs to continue offering SD rewards to users who deposit MaticX.

Llama proposed assigning the Emission_Admin role to Lido for the OP token on the Optimism v3 deployment, enabling Lido to distribute OP rewards on the network.