# Example: Aave v3 Governance A complete walk-through of evaluating Aave v3 against the Protocol Governance domain template. --- ## Subject **Aave v3** — a decentralised lending protocol on Ethereum, Arbitrum, and other EVM chains. Governed by AAVE token holders through on-chain voting, with admin roles, a multisig, timelock, and emergency guardian mechanism. ## Template `protocol.governance` — 6 L1 branches (AND-split), with OR-split subtypes at L2. --- ## Tree Walk ### L1: Token Concentration **Gate:** "Does the protocol have governance tokens?" **Answer:** YES — AAVE governance tokens exist and are used for voting. | Subscore | Value | Evidence | |----------|-------|----------| | `K_whale_concentration` | 0.7 | Top 10 addresses hold significant voting power, though delegation partially distributes influence | | `K_delegation_distribution` | 0.8 | Active delegation ecosystem, but concentrated among a few delegates | ### L1: On-Chain Governance **Gate:** "Does the protocol use on-chain governance voting?" **Answer:** YES — Aave uses an on-chain Governor contract. | Subscore | Value | Evidence | |----------|-------|----------| | `K_proposal_threshold` | 1.0 | Proposal threshold is set to prevent spam while remaining accessible | | `K_quorum_requirement` | 1.0 | Quorum requirements are calibrated to prevent low-participation attacks | **L2 children (OR-split):** - `onchain_1t1v` — "Does it use one-token-one-vote?" → **YES** (Aave uses 1T1V) - `K_snapshot_block` = 1.0 — Snapshot block prevents flash-loan governance attacks - `onchain_ve_locked` — "Does it use vote-escrow?" → **NO** → **PRUNED** - All ve-locked subscores skipped — Aave doesn't use this model ### L1: Admin Key Governance **Gate:** "Does the protocol have admin key privileges?" **Answer:** YES — Aave has admin roles for certain protocol parameters. | Subscore | Value | Evidence | |----------|-------|----------| | `K_admin_scope` | 0.8 | Admin capabilities are scoped but include significant parameter changes | **L2 children (OR-split):** - `single_eoa_admin` → **NO** → PRUNED - `role_based_admin` → **YES** — Aave uses OpenZeppelin AccessControl-style roles - `K_role_separation` = 1.0 — Roles are properly separated with distinct permissions ### L1: Multisig Governance **Gate:** "Does the protocol use a multisig?" **Answer:** YES — Aave uses a multisig for certain operations. | Subscore | Value | Evidence | |----------|-------|----------| | `K_multisig_threshold` | 1.0 | Threshold requires meaningful quorum of signers | ### L1: Timelock Governance **Gate:** "Does the protocol use a timelock for governance changes?" **Answer:** YES — 2-day timelock on governance-approved changes. | Subscore | Value | Evidence | |----------|-------|----------| | `K_timelock_duration` | 1.0 | 2-day delay provides adequate response window | ### L1: Emergency Mechanism **Gate:** "Does the protocol have an emergency pause/guardian?" **Answer:** YES — The Aave Guardian can pause markets and cancel proposals. | Subscore | Value | Evidence | |----------|-------|----------| | `K_guardian_scope` | 0.9 | Guardian has appropriate emergency powers but scope could be more explicitly bounded | --- ## Domain Score ``` Activated subscores: K_whale_concentration = 0.7 K_delegation_distribution = 0.8 K_proposal_threshold = 1.0 K_quorum_requirement = 1.0 K_snapshot_block = 1.0 K_admin_scope = 0.8 K_role_separation = 1.0 K_multisig_threshold = 1.0 K_timelock_duration = 1.0 K_guardian_scope = 0.9 Governance Domain Score = mean(0.7, 0.8, 1.0, 1.0, 1.0, 0.8, 1.0, 1.0, 1.0, 0.9) = 0.92 ``` **Interpretation:** Strong governance containment. The primary gap is token concentration — significant voting power held by a small number of addresses. All structural safeguards (timelock, multisig, emergency mechanism, role separation) are well-implemented. --- ## What This Demonstrates - **Gate pruning:** The `onchain_ve_locked` branch was skipped entirely because Aave uses 1T1V, not vote-escrow. No penalty for unused mechanisms. - **AND-split at L1:** All six governance branches activate independently. Aave happens to use all of them. - **OR-split at L2:** Within `onchain_governance`, exactly one voting model activates. Within `admin_key_governance`, exactly one admin architecture activates. - **Traceability:** The 0.92 domain score traces directly to 10 specific subscores, each with observable evidence. --- ## Related - [[domains/protocol-governance]] — The template this evaluation uses - [[methodology/Scoring]] — How the domain score feeds into the intrinsic score - [[stETH Supply]] — An asset evaluation example