Proposal to add TricryptoGHO to the Gauge Controller

Summary:
This is a joint proposal developed by karpatkey and TokenLogic with the intent to add gauge support for TricryptoGHO pool on mainnet. This Tricrypto pool contains GHO, wBTC, and wstETH.

References/Useful links:

GHO Links

wstETH Links:

Protocol Description:

GHO is a decentralized overcollateralized stablecoin that is initially only minted from assets supplied to the Aave V3 Protocol. GHO’s value is programmatically aligned to the U.S. Dollar, which will be maintained through market efficiency. The protocol uses smart contracts to manage the issuance and burning of the token, and the interest rate from borrowing GHO.

wstETH is a wrapped version of stETH. Due to the nature of Lido, the amount of stETH on a user’s balance is not constant - it changes daily as staking rewards come in. As some DeFi protocols require a constant balance mechanism for tokens, wstETH keeps the balance of stETH fixed and uses an underlying share system to reflect staking rewards.

Motivation:

This proposal aims to add the TricryptoGHO pool to the veCRV gauge on mainnet. This new Tricrypto pool combines Aave’s decentralized stablecoin, yield-bearing Lido’s staked ETH token, and wrapped Bitcoin.

The main assets collateralizing GHO loans are WETH, wstETH and wBTC. On-chain data also suggest these assets represent a significant portion of the flows in GHO swaps. Enabling Aave to incentivize this pool with its CRV will allow Curve and liquidity providers to capture this volume.

Specifications:

  1. Governance:
    The Aave Protocol is a fully decentralized, community-governed protocol, managed by AAVE, aAAVE and stkAAVE token holders. Token holders collectively discuss, propose, and vote on upgrades to the Aave Protocol through Aave Governance. AAVE, aAAVE and stkAAVE token holders can either vote on new proposals or delegate their voting power to an address of choice. As GHO is decentralized, it does not have a single concentrated point of control. Instead, GHO is controlled by Aave Governance.

  2. Oracles:
    The Aave Protocol will always value 1 GHO at the equivalent value of 1 USD, regardless of market price. This helps to maintain stability, creating immediate opportunities to help GHO maintain its peg. Information about the Price Orcacle contract can be found in GHO’s documentation.

  3. Audits:
    Multiple GHO audits can be found here, with the latest one done by Sigma Prime in July 2023.

  4. Centralization vectors:
    As mentioned above, GHO is controlled by Aave Governance which is fully decentralized, community-governed, and managed by AAVE, aAAVE and stkAAVE token holders.
    Users can be liquidated on their GHO borrow positions, the same as any other asset in the Aave Protocol.

  5. Market History:
    GHO does not have a significant market history. Though it has been recently traded below peg, the market price has reacted positively when the borrowing interest rate was increased. There are ongoing community efforts for GHO to recover the peg.

Pool and Gauge

Link to pool: 0x8Cd52ee292313C4D851e71A7064F096504aB3eE9

Link to gauge: 0x6373E119F2A1Fd081249BC16FE7FEA1F6b3A4Ca8

UI: https://curve.fi/#/ethereum/pools/factory-tricrypto-31/deposit

Vote is live in Curve DAO:
https://dao.curve.fi/vote/ownership/579

As well as in Convex:
https://vote.convexfinance.com/#/proposal/0xc605106dbca2fad2b8c24dff16a8b4fc76b1ac556167b0bac381e27fc193da39

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