Leading up to the Instadapp airdrop there were DeFi users, some of whom are Instadapp users, lending/borrowing in Aave V1. These users were left out of the initial Instadapp airdrop allocated to MakerDAO, Compound, and Aave V2 users. To help optimize capital within DeFi, the Instadapp community can incentivize those Aave V1 users to migrate to Aave V2 and create a DSA v.2 smart contract. DSA v.2 will enable all migrated Aave position holders to be eligible for a token allocation similar to those who able to claim for MakerDAO, Compound, Aave V2 positions. This will unlock additional $INST tokens that can be used to enhance liquidity on Uniswap V3 or voting on upcoming proposals.
I propose the Instadapp Treasury allocate $INST to incentivize all Aave V1 position holders to migrate there position to Instadapp DSA v.2 and Aave V2.
To receive an airdrop allocation Aave V1 users must:
-Create Instadapp DSA v.2
-Migrate Aave V1 positions to Aave V2 using Instadapp refinance bridge.
The amount of $INST allocated to Aave V1 users will coincide with the previous airdrop formula. We will compare the TVL of Aave V1 to the overall TVL in DeFi at the time of the original MakerDAO, Compound, and Aave V2 snapshots. Aave V1 position holders within Instadapp during the snapshot will receive double the amount or Aave V1 position holders who held the position in their personal EOA.
Aave V1 is a great product, but Aave V2 allows for more functionality and composability within Instadapp and the entire DeFi space. To align incentives by allotting Aave V1 users a financial/governance incentive to migrate their positions to Aave V2 and DSA v.2, Instadapp will strengthen its ties with another group of DeFi users and absorb additional liquidity to beef up Instadapp network TVL.
All Aave V1 users who migrate their position into Instadapp creating a DSA v.2 and migrating their Aave V1 positions to Aave V2 will be eligible for a $INST token allocation funded by the Instadapp Treasury. The $INST will not come with any lockups and will be liquid the moment it is claimed. This process will also enable $INST Liquidity Mining for all the new Instadapp DSA v.2 users with an Aave V2 position.