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Aave considers proposal to expand into Coinbase-backed Base network

source-logo  theblock.co 24 May 2023 07:32, UTC

Lending project Aave's governing forum is mulling the proposed implementation of its version 3 on Base, the Layer 2 blockchain supported by Coinbase.

The proposal was brought forward on Wednesday by Francis Gowen, a protocol specialist at the analytics firm Flipside Crypto who also serves as a delegate and contributor to Aave. It's currently undergoing an initial “temperature check” stage, when Aave community members can provide feedback.

In the proposal, Gowen outlined suggested risk parameters for assets slated for deployment on Base. If the current phase secures enough preliminary votes of support, the proposal will transition to the next stage for further discussion and risk parameter evaluations. If successful, the proposal will advance to a final on-chain vote, paving the way for deployment.

Gowen's proposal also suggested that integrating Aave with Base could create significant revenue streams for the project and provide it access to a potentially large user base, an expectation underscored by robust developer activity observed during Base’s initial phase. For instance, 18,000 developers have already deployed 55,000 smart contracts on the testnet, signaling strong growth potential for the mainnet upon launch.

Aave lets users lend, borrow and accrue interest

Aave v3 is the third major iteration of the Aave protocol, a decentralized and non-custodial liquidity market protocol that enables users to lend, borrow and accrue interest on various crypto assets, encompassing stablecoins and other tokens.

If greenlit, the proposal would be beneficial for the Base network, which is currently in its testnet phase. The project initially rolled out in February, with plans for a mainnet launch later in the year. The Aave proposal comes a week after Uniswap, the largest decentralized exchange, started deliberations regarding an expansion to Base.

Built on the OP Stack, the Base network is backed by Coinbase and functions as a rollup network, executing off-chain computations on a secondary layer for faster, cheaper transactions, while maintaining the security benefits of the Ethereum mainnet. It’s designed to be a cost-effective Layer 2, serving as a home for Coinbase’s on-chain products.