Major DeFi protocol Aave is reportedly considering implementing Polygon zkEVM, a scaling solution that will launch its mainnet beta on March 27. Based on governance recommendations from Aave Integration Team Lead Marc Zeller, the Polygon zkEVM implementation can be used to implement a Minimum Viable Product (MVP) for Aave v3 with the goal of increasing its presence in new and highly anticipated markets.
#Aave Explore deploying to #polygon zkEVM scaling solution @azcoinnews https://t.co/Jdky91Zfbu
— Kyptos (@azcoinnews) March 5, 2023
Aave is a leader in the field of DeFi lending, allowing users to use their own tokens as collateral to borrow stablecoins and other tokens, and earn interest by locking assets in contracts. Smart tokens provide liquidity. According to DeFillama, as of March 3, 2023, the total value locked (TVL) of seven networks, including Ethereum, is about $46 billion.
To implement the Polygon zkEVM, Aave plans to limit the use of three cryptocurrencies as collateral and set risk parameters more conservatively. Cryptocurrencies under consideration include ethereum, Polygon’s wrap token and stablecoin USDC, which are expected to be the only assets that can be borrowed.
Additionally, the proposal suggests that Aave could explore launching its own stablecoin, GHO, on Polygon zkEVM in the future. Polygon zkEVM, formerly Polygon Hermez, is a zero-knowledge proof (ZK rollup)-based layer 2 scaling solution that aggregates off-chain transactions and stores only cryptographic proofs generated on the blockchain. Ethereum (L1), which provides fast funding and allows high volume transaction processing at low cost.
Polygon zkEVM is designed to emulate the Ethereum Virtual Machine (EVM), allowing developers to easily deploy Ethereum-based applications on their platform using familiar tools such as the MetaMask wallet. It launched its final testnet in December 2022 and launched DeFi projects such as Aave and Uniswap, social platform Lens, and game studio Midnight Society among other participants.
If Aave decides to expand to Polygon zkEVM, it may help increase the transaction processing speed of the platform and reduce fees, making it easier for users to use it. It could also help Aave gain a competitive advantage in new markets and expand its presence in the DeFi ecosystem.
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according to Kyptos