Receiver Entity: Celo Governance
Status: [FINAL]
Title: Stabila Funding Request: Aave Liquidity & Incentives
Authors: @MichaelKwan
Type of Request: Funding
Funding Request: 2,000,000 CELO + 1,000,000 cUSD
Summary:
On behalf of the Stabila Foundation, this proposal requests 2 million CELO and 1 million cUSD from the Celo Community Fund to support Aave’s deployment on Celo through liquidity provisioning and targeted incentives.
Upon approval, the requested funds will be fully withdrawn and allocated as follows:
- Up to 1 million CELO will be immediately deposited into Aave to support CELO liquidity (subject to Aave’s supply cap).
- The remaining funds will be used for additional liquidity provisioning (allocated immediately as needed) or for incentives distributed over 12 months to deepen liquidity and drive lending/borrowing activity across initial CELO, USDC, USDT, cUSD, and cEUR markets.
Funds will be flexibly reallocated as new Aave markets launch or if supply caps are adjusted. This initiative ensures a successful Aave launch with sufficient liquidity and incentives, strengthening Celo’s position as a leading blockchain for stablecoins and DeFi.
Motivation:
Aave is a Tier 1 DeFi lending and borrowing protocol, and its successful launch on Celo is critical to expanding liquidity, increasing DeFi activity, and driving stablecoin adoption.
Aave’s launch on Celo is imminent; the Aave community has already approved the deployment of Aave on Celo via ARFC: Aave Deployment on Celo and the subsequent a.DI Celo Path activation, which includes a $3 million incentive commitment over three years (to be funded by the Celo Foundation or ecosystem partners).
Why Stabila?
The Stabila Foundation is committed to accelerating stablecoin adoption and is well positioned as an ecosystem partner to:
- Contribute towards the Aave $3 million incentive commitment
- Provide crucial liquidity provisioning
- Ensure a successful launch and sustained adoption
Stabila Foundation: Proven Track Record
Since its launch in May 2024, the Stabila Foundation has played a significant role in the adoption of stablecoins and DeFi growth on Celo:
- Stablecoin Supply Growth: Helped grow Celo’s stablecoin supply from $98 million in June 2024 to over $257 million in less than a year.
- Monthly Stablecoin Transfer Volume: Contributed to increasing transfer volume from $671M to over $5B through strategic campaigns.
- Uniswap V3 Trading Volume: Elevated Celo to the 7th largest Uniswap V3 chain with $6.3B in all-time volumes through the Merkl On-Chain FX Campaign,
- Uniswap Proposal #77: Secured $250K in UNI incentives and Oku Trade deployment from Uniswap DAO, with Stabila contributing $500K in CELO co-incentives (post-L2 launch) to enhance the On-Chain FX Campaign.
- User Onboarding: Helped onboard over 100,000 new users through Trust Wallet and Valora x Tether campaigns.
Why Additional Funding is Needed:
The Stabila Foundation currently holds 2.1M CELO from its original 5M CELO allocation; however, these funds are fully earmarked for strategic initiatives, including On-Chain FX Campaign (ongoing) and Uniswap DAO co-incentives.
To ensure the successful deployment of Aave on Celo, additional funding is necessary to meet the initial liquidity requirements and incentives needed per the Aave proposal for its successful deployment. This proposal prioritizes a 12-month timeline to provide targeted support during Aave’s first year, ensuring prudent fund management while considering CELO’s price volatility.
Specification:
The Stabila Foundation will provide targeted liquidity and incentives to drive Aave’s adoption on Celo, specifically:
- Immediate deposit of up to 1M CELO to bootstrap CELO liquidity.
- Allocate additional liquidity immediately as needed to strengthen borrowing and lending depth across USDC, USDT, cUSD, and cEUR markets.
- Deploy targeted incentives over 12 months to stimulate lending and borrowing demand
- Flexible fund reallocation as new Aave markets launch.
This proposal aligns with Chaos Labs’ parameter recommendations for Aave’s launch, ensuring deep liquidity, active participation, and sustainable growth.
Metrics & KPIs:
The primary success metric is to fill the initial supply caps for Aave’s launch markets, starting with collateral assets, as outlined in Chaos Labs’ risk parameters:
Asset | Supply Cap | Borrow Cap | Collateral Status |
---|---|---|---|
CELO | 1,000,000 | 500,000 | Yes |
USDC | 2,000,000 | 1,800,000 | Yes |
USDT | 700,000 | 650,000 | Yes |
cUSD | 2,000,000 | 1,800,000 | No |
cEUR | 800,000 | 700,000 | No |
If supply caps are maxed out, additional incentives and liquidity provisioning will be adjusted to sustain demand.
The Stabila Foundation will collaborate with the Celo Foundation and other ecosystem partners to fill any liquidity gaps and ensure Aave’s long-term success.
Current Status:
With the Aave’s a.DI Celo Path activation approved, the launch of Celo is imminent. Stabila aims to be fully prepared to support Aave’s success from day one.
Timeline and Milestones:
Milestone | Description | Timeline |
---|---|---|
Proposal Approval | Upon approval, the full 2M CELO and 1M cUSD will be withdrawn to Stabila’s multisig | Immediately |
Aave Deployment on Celo | Stabila will deposit up to 1M CELO into Aave | Upon Aave go-live |
Liquidity & Incentive Deployment | Additional liquidity allocated & incentives distributed | Ongoing over 12 months |
Reallocation for New Markets | Adjust fund allocation based on demand & new Aave markets | As new markets are added |
Quarterly Reporting | Provide updates on fund deployment & impact. | Every 3 months |
Detailed Budget:
Allocation | Amount | Purpose |
---|---|---|
Primary Liquidity Provisioning | Up to 1M CELO | Deposited into Aave to support CELO market liquidity. |
Flexible Support (Liquidity & Incentives) | 1M CELO + 1M cUSD | Additional liquidity provisioning (allocated immediately as needed) and incentive distribution over 12 months. |
This approach ensures immediate liquidity support while maintaining flexibility to adjust incentives based on market conditions.
Payment Terms:
Funds will be fully withdrawn upon approval and transferred to the Stabila Foundation’s multisig wallet: 0x9C257bDC314dc516e673728D70F45444F6e22412
Team:
The Stabila Foundation will manage fund allocation and oversight. At the time of this proposal, the multisig signers include all known Celo contributors:
- Kevin Tharayil: 0x3489A2Fe2924275c6A4b05508C77802f272d6D00
- Productmatt: 0x1f5979355411dF24c5Ce21Df5bD9f2fff418c194
- Martin Volpe: 0x0159B8f51fA6eDEF721d6D87002587130CD8246c
- Michael Kwan: 0x78670759E39E955E55EFA52d6d4BECa86F40b498
Additional Support/Resources:
N/A
Conclusion:
Aave’s launch on Celo represents a major milestone for expanding the network’s DeFi ecosystem and stablecoin adoption. We encourage the Celo community to support this proposal and help unlock Aave’s full potential on Celo.
Thank you for your consideration.