Aave’s Third-Generation Lending Protocol Moves Closer to Deployment on Sonic Blockchain

Sonic, formerly known as Fantom, has cleared the first hurdle in launching Aave’s third-generation lending protocol on its blockchain. An on-chain temperature check, conducted to gauge community support for integrating Aave with Sonic’s blockchain, reached a quorum on December 27.

Aave v3 Deployment Process

The proposal, submitted by Aave Chain, a major delegate at the AaveDAO, will now proceed to the Aave Request for Comment (ARFC) stage. This stage allows governance members and service providers to provide feedback on the proposal.

A successful ARFC will unlock a final Aave Improvement Proposal (AIP) vote to approve shipping Aave v3 on the new layer-1 network.

Benefits of Aave v3 on Sonic

Aave dominates the DeFi lending market with billions of dollars in total value locked. Launching on the L1 would allow Sonic users to tap into on-chain native credit lines and offer liquidity to other investors.

Sonic’s rebrand from its Fantom era might also smoothen the deployment process. The team, featuring a roster of veteran builders, previously grew Fantom to a peak TVL of circa $14.5 billion in 2021.

Sonic’s Blockchain Capabilities

The new L1 blockchain is designed to execute 10,000 transactions per second, with a fee monetization model to attract web3 developers.

Aave’s Decision to Pull Out of Polygon

Aave is likely to pull its lending markets from Polygon due to issues with a Polygon proposal that would expose Aave-native collateral to bad debt.

According to Stani Kulechov, Aave’s founder and CEO, the decision was made to protect user security.

Polygon co-founder Sandeep Nailwal has accused Aave of bullying the ecosystem and using anti-competitive tactics, which Kulechov has refuted.

Key Takeaways

  • Aave’s third-generation lending protocol is one step closer to deployment on Sonic’s blockchain.
  • The proposal has cleared the on-chain temperature check and will now proceed to the ARFC stage.
  • Aave’s deployment on Sonic will allow users to tap into on-chain native credit lines and offer liquidity to other investors.
  • Sonic’s rebrand from its Fantom era might smoothen the deployment process.

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