[ARFC] Deployment of Aave on Linea
Author: ACI
Date: 2024-11-19
Risk Parameters have been updated and ARFC has been updated 2024-11-29
Simple Summary
The current ARFC proposes deploying Aave V3 on Linea to expand Aave’s reach and use cases on zk-Rollups. By integrating with Linea, Aave can offer users more efficient transactions while maintaining the security of the Ethereum mainnet. This ARFC seeks governance approval to deploy an Aave V3 instance on Linea.
Motivation
Linea is a Layer 2 built on Ethereum, powered by a zkEVM tech stack developed by Consensys. Linea is the result of more than five years of cryptographic research and 20 months of dedicated R&D. The Consensys team has a strong track record in the zk space, including contributions like the GNARK library and active involvement in Ethereum's Merge. Linea is well-positioned within the developer ecosystem through relationships with MetaMask, SMG, and Infura.
By deploying on Linea, Aave can leverage high throughput and fast finality, enabling efficient transaction processing and reduced gas fees. Additionally, Linea's integration with Consensys products allows seamless distribution to users, potentially reaching MetaMask's 30 million active users. This presents an opportunity to make DeFi more accessible and expand Aave's user base.
Linea’s TVL currently sits at ~$780M. Further Linea market data can be found here.
Benefits of deploying to Linea
- Scalability and Performance: Linea enables high throughput and fast finality for zk networks, allowing Aave to scale effectively alongside Linea as its technology advances.
- Accessibility and Distribution: Linea is integrated with Consensys products like MetaMask, and Infura, facilitating seamless distribution to users and making DeFi more accessible to MetaMask's 30 million active users.
- GHO Integration: Upon successful deployment and bootstrapping of Aave on Linea, the Consensys team is motivated to enable GHO, Aave's stablecoin, to be spendable on the MetaMask Debit Card, which is exclusively available on Linea.
- Growth Opportunities: With exciting growth catalysts for Linea in the upcoming H1, establishing Aave as the premier lending market on Linea will ensure long-term sustainability and growth for the Aave protocol.
Proof of Liquidity (POL) and Deposit Commitments
- Aave DAO commits to redistribute to Aave users via liquidity mining, GHO secondary liquidity incentives, safety module deployments, or merit programs any airdrop provided by the Linea ecosystem.
- ACI, on behalf of the Aave DAO, will coordinate any liquidity mining campaign on a Linea Aave V3 deployment.
Risk Parameters
Risk parameters will be provided by service providers and this section will be updated in due course.
| Asset | Supply on Linea | Marketcap on Linea | Volume | Liquidity | Lineascan |
|---|---|---|---|---|---|
| WETH | 22,800 | $78,9M | $18.15M | $11.7M | URL |
| weETH | 22,900 | $83,3M | $2.5M | $5.1M | URL |
| ezETH | 34,600 | $124,4M | $4.9M | $12.1M | URL |
| wstETH | 2,500 | $10,2M | $85,000 | $4.6M | URL |
| WBTC | 220 | $20,2M | $2.7M | $3.6M | URL |
| USDC.e | 28,700,000 | $28,7M | $4.7M | $8.8M | URL |
| USDT | 10,400,000 | $10,4M | $7.3M | $9.9M | URL |
| WETH | wstETH | ezETH | weETH | WBTC | USDC | USDT | |
|---|---|---|---|---|---|---|---|
| Isolation Mode | No | No | No | No | No | No | No |
| Enable Borrow | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Enable Collateral | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Loan To Value | 80% | 75% | 72% | 72.5% | 73% | 75% | 75% |
| Liquidation Threshold | 83% | 79% | 75% | 75% | 78% | 78% | 78% |
| Liquidation Bonus | 6% | 7% | 7.5% | 7.5% | 7% | 5% | 5% |
| Reserve Factor | 15% | 5% | 45% | 45% | 20% | 10% | 10% |
| Liquidation Protocol Fee | 10% | 10% | 10% | 10% | 10% | 10% | 10% |
| Supply Cap | 1,200 | 800 | 1,200 | 1,200 | 25 | 12,000,000 | 7,800,000 |
| Borrow Cap | 1,100 | 400 | 600 | 600 | 12.5 | 11,000,000 | 7,150,000 |
| Debt Ceiling | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| UOptimal | 90% | 45% | 45% | 45% | 45% | 90% | 90% |
| Base | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Slope1 | 2.7% | 7% | 7% | 7% | 7% | 5.5% | 5.5% |
| Slope2 | 80% | 300% | 300% | 300% | 300% | 60% | 60% |
| Stable Borrowing | No | No | No | No | No | No | No |
| Flashloanable | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Siloed Borrowing | No | No | No | No | No | No | No |
| Borrowable in Isolation | No | No | No | No | No | Yes | Yes |
| E-Mode Category | Ethereum Correlated | Ethereum Correlated, wstETH/WETH | Ethereum Correlated | Ethereum Correlated | N/A | N/A | N/A |
ETH-Correlated E-Mode
| Parameter | Value | Value | Value | Value |
|---|---|---|---|---|
| Asset | WETH | wstETH | weETH | ezETH |
| Collateral | No | Yes | Yes | Yes |
| Borrowable | Yes | No | No | No |
| Max LTV | 90% | 90% | 90% | 90% |
| Liquidation Threshold | 93% | 93% | 93% | 93% |
| Liquidation Penalty | 1.00% | 1.00% | 1.00% | 1.00% |
wstETH/WETH E-Mode
| Parameter | Value | Value |
|---|---|---|
| Asset | WETH | wstETH |
| Collateral | No | Yes |
| Borrowable | Yes | No |
| Max LTV | 93.5% | 93.5% |
| Liquidation Threshold | 95.5% | 95.5% |
| Liquidation Penalty | 1.00% | 1.00% |
Useful Links
Next Steps
- If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage.
- If the ARFC snapshot outcome is YAE, coordinate with BGDLabs and BGD service providers for an Aave V3 instance deployment on Linea.
Disclaimer
This proposal is powered by Skywards. The Aave Chan Initiative is not directly affiliated with Linea and did not receive compensation for creating this proposal.
Copyright
Copyright and related rights waived under CC0
Off-Chain Vote
YAE
875.06K AAVE100%
NAY
0.2 AAVE0%
Abstain
0 AAVE0%
Discussion
Timeline
Dec 09, 2024Proposal created
Dec 10, 2024Proposal vote started
Dec 13, 2024Proposal vote ended
Feb 03, 2026Proposal updated