Aave Fork

## What is Aave
Aave is a decentralized non-custodial money market protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers can borrow in an overcollateralized (perpetually) or undercollateralized (one-block liquidity) fashion (ie flash loan)

## How does it work (user perspective)
users deposit tokens into the protocol, they receive an hToken token in return. this hToken then accrues interest. further, when depositing, users can enable there deposit to be used as collateral and use this to borrow other assets. this is functionally equivalent to offering leverage facility, for example, if a user deposits HNY, they can then use that as collateral to borrow DAI and buy more HNY.

## How does this benefit 1Hive
currently, we have Honeyswap, which allows users to trade on xDAI with super low fees. The total fees generated in HoneySwap are rather low, and as such we have subsidised liquidity providers by allowing them to farm HNY. This has had mixed results.

with Agaave, we would enable users to earn a yield on tokens and LP tokens without subsidising with HNY tokens. Furthermore, as the HNY price rises, holders will have the option to lock up HNY instead of selling it. It also adds extra incentives to liquidity providers by giving them an additional stream of income above the fees generated on HoneySwap

One of the most powerful features of DeFi is its composability. currently, HoneySwap is not composable with the other DeFi protocols because it is on a separate chain. With Agaave, we will now have another protocol on xDAI making it more sticky 

Although we will be forking Aave, we will use this as a base for a protocol that fits the needs of the 1Hive community, and as an opportunity to give HNY more utility as well as increase the price of HNY

## Token
Aave has a token primarily used for governance over the protocol. 
- adding/removing tokens from the market
- enabling/disabling the ability to use specific tokens as collateral
- setting the collateral rates
- Maximum LTV (loan to value rate)
- Liquidation threshold
- Liquidation penalty
- Used as collateral
- Stable borrowing

The token is also stackable, giving Aave holders the ability to earn a yield on the Aave token its self. the pool of staked tokens is used as insurance in the case of a shortfall event

## Scope of MVP
### front end for interacting with the protocol 
- the frontend of Aave is not open-sourced so we will have to build one our selves from scratch. This MVP UI will enable the community to test out the functionality without having to interact with the contracts directly 
### Backend
- we will need a server to calculate historical interest rates for the front end. Aave uses TheGraph to serve this up to the UI. we will have something similar
### contracts
- we will not be modifying any of the core Aave contracts other than the market configuration and renaming aTokens -> hTokens
- ChainLink Aggregator contracts (oracles)
## Outside the scope
- any smart contract changes to the core protocol
- modifying the economics of the system
- staking 
- governance
- the decision to use HNY or a new token to govern the protocol
- integrations with Celeste
## financing
Green Hornet is loaning the project 50 HNY and 10000 DAI to bootstrap the development of the project. the funds are held in [this multisig](https://xdai.gnosis-safe.io/app/#/safes/0xED815c739A4e29e37B7a6bA1ddeAD48e8a06C55C/balances). when we are halfway through the MVP development cycle, we will apply for the funds to be refunded from the honeypot. 

honeypooh will be doing the heavy lifting on the front end and as such will be compensated flat fee of 5000 DAI for the MVP. The rest of the team (currently: anisoptera, sandpiper, monstrosity, greenhornet) will be paid $40 p/h of work on the project.

anyone wishing to be part of the initial development team should contact monstrosity, he will add you to the private chat we are using to coordinate

## Descussions for the community 

- Agaave token, should we use HNY or another token?
- if we use another token how should we distribute it?
- should we work Celeste into the protocol and how?