Strategic Partnership Analysis: Aave x TraderJoe

Aave x TraderJoe: 'Zap' into an Aave v3 position via TraderJoe.

Strategy

The integration of aTokens in Traderjoe's zap feature would provide a seamless transition for users to acquire an interest bearing aToken. An example of this would look similar to the Zapper.fi's save feature. Currently, Aave is the largest protocol on the Avalanche chain ($2.71B TVL), and TraderJoe is the second largest ($1.31B TVL). Aave could also choose allocate $AAVE to incentivize aToken farming rewards on the TraderJoe platform. The Aave community would be required to apply for farming on TraderJoe here (more info on TraderJoe Collab Process here).

More on TraderJoe here.

Benefits

If TraderJoe offers their 'Zap' feature for Aave positions, this collaboration would bring a large number of TraderJoe users to the Aave platform. With the addition of farming rewards on TraderJoe, Aave users would have the opportunity to earn additional yield on their Aave positions, and the Aave protocol would be well positioned to increase their overall marketshare on the Avalanche chain.

Risks

The most notable risks involved in a collaboration of this nature would come from the underlying protocol being compromised by attackers. In an effort to circumvent this scenario, TraderJoe has undergone multiple audits, and also has an ongoing bug bounty initiative. Technical risks for the TraderJoe protocol can be found in the audit reports here.

Funds are held on 3 separate Multisig addresses, listed below.

Multisig 1: 0xD858eBAa943b4C2fb06BA0Ba8920A132fd2410eE (Snowtrace)

Multisig 2: 0x799d4C5E577cF80221A076064a2054430D2af5cD (Snowtrace)

Multisig 3: 0x8F38558188FAe593E8E6347F124351CF4fDd032D (Snowtrace)

(Additional Contract Addresses)

Aave Governance Requirements

This collaboration would see funds moving from the Aave treasury in order to fund farming on the TraderJoe protocol. Therefore, the full Aave governance process would be required in order to act on this strategy. This would include an ARC posting in the Aave governance forums, followed by a Snapshot vote. The finality of this strategic proposal would then be determined on chain following an AIP.

Relevant Links:

TraderJoe Links