Stabila Funding Request: Aave Liquidity & Incentives

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Upon approval, the requested funds will be fully withdrawn and allocated as follows: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.

6 Likes

Hello @MichaelKwan thanks for posting this proposal, to ensure all Governance Proposals follow same structure we are enforcing the use of this format.

In this order, we kindly ask you please ensure your proposal is structured using the suggested format and subtitles listed below.

Feel free to expand as much you need in any item and also add subitems if you need to include some other info you consider relevant for your proposal.

1. Summary
2. Motivation
3. Specification
4. Metrics and KPIs
5. Current Status
6. Timeline and Milestones
7. Detailed Budget
8. Payment Terms
9. Team
10. Additional Support/Resources
4 Likes

Thank you, @celogovernance, for the feedback! I’ve restructured the proposal to align with the required format.

1 Like

What would happen to the 1M Celo requested in the long run? (assuming it will not be deposited forever, which is an option of the deposit tokens get burned)

3 Likes

Thank you for the question. Stabila is considering a 3-year time horizon for the 1M CELO to remain in the liquidity pool, particularly if borrowing demand grows and Aave’s supply cap increases.

If other participants step in to provide sufficient CELO liquidity, the funds could be reallocated to other deposit assets or used to bootstrap new Aave markets. If no longer needed, the CELO will be returned to the Celo Community Fund. Stabila remains committed to ensuring efficient use of funds while maintaining flexibility based on market conditions.

2 Likes

I feel that a 2/3 multisig for such a big amount of funds it’s too risky.

Would you consider going for a 5/7 multisig instead?

2 Likes

Stabila recognizes the importance of securing community funds and is open to expanding the number of multi-sig signers in the future. The current structure ensures efficient execution while maintaining security, with nearly 3M CELO already deployed by Stabila for various stablecoin-related initiatives.

Given the time-sensitive nature of this proposal, adding more signers now would delay execution. Current signers are trusted ecosystem participants with experience managing multi-sig operations.

As Stabila’s work expands, additional trusted and experienced individuals are being onboarded to the multi-sig, a process that will continue in the coming quarter. In addition to the existing signers, I (Michael Kwan, Strategic Initiative Lead at Celo Foundation) am in the process of being added, bringing the total to four signers.

4 Likes

Update: I have been officially added to the Stabila Multi-SigMichael Kwan 0x78670759E39E955E55EFA52d6d4BECa86F40b498.

5 Likes

Hello @MichaelKwan and team, as part of our governance process and to demonstrate good faith to the approvers, we kindly ask each signer involved in the multisign to comment on this forum thread using their personal forum account.

@Kevin @matt @martinvol please confirm:

  1. That you are a signer on the multisign.
  2. The wallet address you will be using for this purpose.

This will help ensure transparency and alignment within the community. Looking forward to your confirmations.

2 Likes

Hi this is Kevin – confirming I’m a signer and my address: 0x3489A2Fe2924275c6A4b05508C77802f272d6D00

3 Likes

Thanks @MichaelKwan and team for updating the proposal, please edit your initial post and change the label to [FINAL], at my end this proposal is fullfilling all the requeriments:

  • Post a proposal in the Celo Forum and leave it for discussion at least for seven (7) days.
  • Present Proposal in a Governance Call and address the feedback received: Proposal was presented during Celo Governance Call #59 | February 6th, 2025

With the above said, from my end the proposal is ready to move into the voting phase when proposer wants to move forward or consider is appropiate.


:bangbang: Remember Current Celo Governance Overview & Procedures

To proceed to the submission and voting phase at least two Celo Governance Guardians must post explicitly that the proposal fulfills the requirements to be able to move into the Voting Stage in the proposal thread on the Celo Forum.


Remember next steps

  • Submission of PR to Celo Governance Repository
    Proposers needs to fork the Celo Governance Repository and add a PR including the proposal .md file and json file.
  • Approval of PR by Celo governance Guardians and merge into main branch of Celo Governance Repository.
    Celo Guardians are responsible for conducting a comprehensive review of every Pull Request (PR) to ensure that there is complete alignment and consistency between the final proposal posted in the forum post and the specific files that are being requested to be merged.
    This review process is strictly technical in nature, focusing solely on verifying the authenticity and good faith of the proposers. It does not involve any personal opinions or biases regarding the merits or content of the proposal itself. To maintain the integrity of the Celo Governance repository, it is mandatory to obtain approval from a minimum of two Governance Guardians for each PR before it can be merged into the main branch.
  • OnChain Submission of Proposal
    After PR is merged into main Governance Repo the proposers needs to fork locally the Celo Governance Repository and submit the proposal onchain using the guidelines described in the Celo Docs.

CC: Governance Working Group (@annaalexa @Wade @0xGoldo)

1 Like

Thanks, @MichaelKwan and team, for updating the proposal. Also from my perspective, the proposal now meets all the necessary requirements:

  • It has been posted on the Celo Forum and remained open for discussion for at least seven (7) days.
  • It was presented during Celo Governance Call #59 on February 6th, 2025, and the feedback received has been addressed.

With that in mind, I consider the proposal ready to move to the voting phase whenever the proposer decides to proceed.

2 Likes

confirming too I’m a signer with 0x1f5979355411dF24c5Ce21Df5bD9f2fff418c194

2 Likes

I confirm my address is 0x0159B8f51fA6eDEF721d6D87002587130CD8246c

2 Likes

I’m in favor of bootstrapping the AAVE market and incentives! However, I would like to better understand the breakdown between market liquidity and incentives and what will happen with the market liquidity share of this budget post (12-month period).

From my point of view, bootstrapping with, for example, 1m cUSD and 1m CELO in liquidity + 1M in CELO rewards makes sense, but it would be important for the 1m cUSD and 1m CELO + lending gains to be returned the Celo Community Treasury at a given point.

@MichaelKwan can you comment on the breakdown between Market Liquidity and Incentives and if / when the Market Liquidity share would be returend to the Community Treasury?

4 Likes

Similar question, I know a couple of others have asked around this too.

The way the original post was worded was that this simply that the liquidity provisioning was a one-way permanent gift, which reads like a shakedown “pay to play” type of deal. That’s probably not the case however, so just some clarity on the final life-cycle of those funds would be good.

Having Celo on Aave is long overdue and would be amazing, can’t wait.

2 Likes

Thanks @LuukDAO and @Thylacine for the question,

We are looking at a three-year time horizon for liquidity provisioning:

  • 1M CELO will be deposited into Aave to support CELO market liquidity.
  • 1M cUSD to be deposited into cUSD or swapped and deposited into other stablecoin assets such as USDC or USDT, depending on supply caps and liquidity contributions from other ecosystem partners.
  • The remaining 1M CELO will be used for incentives.

At the end of the three-year period, the 1M CELO, 1M cUSD, and any accrued lending interest will be returned to the Celo Community Fund

6 Likes

Perfect, thanks for adding these details. I’m in favor of this proposal moving forward.

1 Like