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- Aave DAO is pondering incentivizing migration from Polygon
- Aave DAO said it doesn’t believe Polygon’s contemporary proposal to employ stablecoin reserves for yield farming on thoroughly different DeFi platforms
- Polygon has eminent that the proposal is in its early phases and it’s within the interim listening to the neighborhood
Aave DAO may maybe perchance perchance also cease operations on the Ethereum layer 2 platform Polygon if the scaling layer upholds a proposal to employ stablecoin reserves for yield farming. In conserving with Aave chain founder Marc Zeller, Polygon’s proposal “will tremendously impact the chance profiles of bridged resources within the” scaling layer. Zeller eminent that the dangers are prone to spill over to Aave V2 and V3 on Polygon, something that Aave isn’t ready to rob potentialities with pondering it has been tormented by bridge vulnerabilities within the previous.
Aave Needs to “Incentivize Migration”
Zeller has fronted suggestions to the Aave neighborhood searching out to regulate the “risk parameters” for Polygon-powered Aave conditions in a formulation that can “incentivize migration” from the scaling layer. Amongst the suggestions is to diminish the loan-to-value (LTV) ratio for all resources on Polygon-primarily primarily based Aave implementation to 0%.
Adjusting the LTV ratio successfully deactivates the likelihood to employ bridged resources on Aave, consequently sending such customers to totally different Aave conditions with the availability. Various recommendations embrace freezing “reserves on Aave V3 Polygon” and migrating “Aave Governance V3 voting infrastructure to yet any other L2 community.”
Zeller’s suggestions are tranquil within the infancy stage and are ready for suggestions from all stakeholders ahead of graduating to the snapshot and AIP phases.
Aave Isn’t the First to Ditch Polygon
In conserving with a Polygon Pre-PIP, the scaling layer seeks to deposit stablecoin reserves of the Polygon PoS Portal Bridge “into curated liquidity swimming pools” Polygon has, alternatively, said that it’s tranquil gathering neighborhood suggestions ahead of presenting the proposal for voting.
Aave’s thoughts to ditch Polygon comes now now not up to a week after Sports actions Illustrated migrated its NFT ticketing platform from Polygon to Avalanche, a layer one blockchain.
With Aave contemplating leaving Polygon, it’s to be seen whether thoroughly different DeFi protocols will moreover disagree with the layer 2’s proposal to employ resources deposited on its bridge for yield farming actions.
