Aave is about to launch its protocol on Linea following a neighborhood vote, months after its forked rival on the identical community got here underneath scrutiny.
The Aave (AAVE) neighborhood has greenlit proposal #5ae27, which proposes deploying the Aave V3 protocol on Linea, a zk-rollup community supported by Consensys. The proposal, first submitted on November 19, obtained overwhelming assist, with greater than 636,000 AAVE tokens in favor, marking a powerful push for Aave to increase its attain in decentralized finance.
Desk of contents
Why Linea
Linea is a layer 2 community constructed on Ethereum, which is powered by a zero-knowledge Ethereum Digital Machine. Linea was developed by Consensys and goals to resolve widespread issues with Ethereum, resembling gradual speeds and excessive charges.
Nonetheless, what actually units Linea aside from its rivals is its integration with different Consensys merchandise. For instance, Consensys operates the non-custodial crypto pockets MetaMask and the blockchain infrastructure supplier Infura.
You may additionally like: Consensys establishes a Swiss non-profit group to assist Linea’s decentralization
With MetaMask’s 30 million lively customers, this might give Aave a major alternative to faucet right into a a lot bigger consumer base. Nonetheless, it stays unsure whether or not this enlargement might be profitable in the long run. On the time of writing, the Linea community has a complete locked worth of virtually $450 million, in response to information from DefiLlama.
What it means for Aave
With the enlargement to Linea, Aave hopes to supply its customers higher scalability, sooner transactions and decrease prices. One other bonus is the mixing of the protocol’s GHO stablecoin with MetaMask’s debit card, which solely works on Linea. Nonetheless, particulars about this characteristic are nonetheless obscure and seem like extra of a teaser for now.
Prime protocols from TVL | Supply: DefiLlama
It is value noting that Aave alone is without doubt one of the largest defi protocols, managing greater than $21 billion in TVL throughout 12 blockchains, alongside staking protocol Lido, which has greater than $36 billion in TVL, in response to DefiLlama information.
Linea’s zk-rollup know-how might doubtlessly play a key position in making Aave’s companies extra environment friendly and cost-effective, because the protocol additionally plans to allocate ecosystem incentives, resembling stablecoin incentives, to encourage adoption on Linea .
The Shadow of ZeroLend
What’s attention-grabbing is that Aave’s enlargement to Linea comes simply months after competitor ZeroLend tried an identical transfer. ZeroLend, a spin-off of Aave, confronted criticism and controversy earlier this yr. The factor is, critics accused the protocol of being a low-effort fork of Aave, with one board consultant even calling it “the Aave codebase with a high-inflation token on high.”
The largest protocol on linea (consensys) is a copy-paste aave fork that forgot to vary documentation hotlinks that also hyperlink to aave docs
Ethereum folks have to shut up for 30 days and watch the nonsense they’re peddling to the world
go hold a clear home pic.twitter.com/MibgMXppuo
— imajin (@majinsayan) July 6, 2024
Moreover, the fork additionally bumped into hassle when customers found that the cellular model of the web site was being redirected to Aave’s FAQ part, as reported by Protos. Nonetheless, regardless of some controversy, ZeroLend nonetheless managed to rake in additional than $250 million in TVL on Linea, accounting for greater than a 3rd of the community’s whole TVL very quickly.
Governance and subsequent steps
The issue with the proposal to deploy Aave V3 on Linea is that it seems to have obtained huge assist from only one constituent: the Aave Chan Initiative, a gaggle that guides governance discussions throughout the Aave neighborhood. It additionally seems to be the creator of the proposal itself. Nonetheless, it stays to be seen how the broader Aave neighborhood will finally reply to the enlargement.
The voting outcomes for proposal 5ae27 | Supply: snapshot
In accordance with the proposal’s voting historical past, practically 58% of voting energy is concentrated in a single deal with, which seems to be managed by the Aave Chan Initiative. One other AaveDAO delegate, underneath the alias “ezr3al.eth”, contributed 24.3% of the full voting energy in assist of the proposal.
“By deploying on Linea, Aave can leverage excessive throughput and quick finality, enabling environment friendly transaction processing and decrease gasoline prices,” ACI stated within the proposal description. It additionally emphasised that it “has not obtained any compensation for creating this proposal.”
The following steps embody working with growth groups to deploy to Linea. Danger parameters for wrapped tokens resembling Wrapped Ethereum (WETH), Wrapped Bitcoin (WBTC) and Circle’s stablecoin USD Coin (USDC) have already been established, designed to make sure the safety and efficiency of the protocol on the brand new community, ACI claims.
AAVE’s worth reacted minimally to the information, buying and selling at $282.74, reflecting a slight decline of 0.05% previously 24 hours.
Learn extra: Aave Whales in a Selloff Wave: Can the Altcoin Survive the Dump?