By Philip Maina
3 days agoTue Dec 17 2024 12:25:48
Checking out Time: 2 minutes
- Aave DAO is thinking about incentivizing migration from Polygon
- Aave DAO stated it does not concur with Polygon’s current proposition to utilize stablecoin reserves for yield farming on other DeFi platforms
- Polygon has actually kept in mind that the proposition remains in its early phases and it’s presently listening to the neighborhood
Aave DAO might stop operations on the Ethereum layer 2 platform Polygon if the scaling layer maintains a proposition to utilize stablecoin reserves for yield farming. According to Aave chain creator Marc Zeller, Polygon’s proposition “will considerably affect the threat profiles of bridged possessions within the” scaling layer. Zeller kept in mind that the dangers are most likely to overflow to Aave V2 and V3 on Polygon, something that Aave isn’t all set to take possibilities with considering it has actually been impacted by bridge vulnerabilities in the past.
Aave Wants to “Incentivize Migration”
Zeller has actually fronted tips to the Aave neighborhood looking for to change the “threat specifications” for Polygon-powered Aave circumstances in a manner that will “incentivize migration” from the scaling layer. Amongst the tips is to minimize the loan-to-value (LTV) ratio for all possessions on Polygon-based Aave execution to 0%.
Changing the LTV ratio successfully shuts down the alternative to utilize bridged possessions on Aave, subsequently sending out such users to other Aave circumstances with the arrangement. Other alternatives consist of freezing “reserves on Aave V3 Polygon” and moving “Aave Governance V3 ballot facilities to another L2 network.”
Zeller’s tips are still in the infancy phase and are waiting for feedback from all stakeholders before finishing to the picture and AIP phases.
Aave Isn’t the First to Ditch Polygon
According to a Polygon Pre-PIP, the scaling layer looks for to deposit stablecoin reserves of the Polygon PoS Portal Bridge “into curated liquidity swimming pools” Polygon has, nevertheless, stated that it’s still gathering neighborhood feedback before providing the proposition for ballot.
Aave’s ideas to ditch Polygon comes less than a week after Sports Illustrated moved its NFT ticketing platform from Polygon to Avalanche, a layer one blockchain.
With Aave pondering leaving Polygon, it’s to be seen whether other DeFi procedures will likewise disagree with the layer 2’s proposition to utilize possessions transferred on its bridge for yield farming activities.
