Aave V3 may launch on Neon EVM, the first Ethereum-compatible layer for Solana
Aave, the leading decentralized lending protocol, may soon expand its presence on Solana, the fast-growing blockchain platform that boasts high scalability and low fees. Two organizations, Neon Foundation and Aave-Chan Initiative, are considering a proposal to deploy a minimum viable product (MVP) version of Aave V3 on Neon EVM, the first Ethereum Virtual Machine (EVM) designed for Solana.
The deployment of Aave V3 on Neon EVM would allow Aave to access the deep liquidity on Solana, and enable the users of the Solana ecosystem to access the top lending protocol through Neon EVM. The proposal recommends limiting the deployment of assets and setting the risk parameters cautiously. Specifically, it mentions three types of collateral assets: SOL, mSOL, jitoSOL, and only one borrowable stablecoin: Circle’s USDC.
Go check out our proposal in the @aave governance forum!
This is our first step in bringing Aave V3 MVP to Neon mainnet, expanding Aave’s presence and enabling access to the Solana ecosytem.https://t.co/P68kusOggV
— Neon (@Neon_EVM) January 15, 2024
The proposal is currently in the “Temp Check” stage, where the members of the Aave community can share their views and feedback on the integration. Once the proposal receives enough preliminary support, it will move to the on-chain voting stage to reach the final decision.
The community expects the proposal to be approved, as the forked version of Aave V3 has been deployed on Neon EVM Devnet and showed full compatibility. The deployment would allow Aave to leverage the liquidity of Solana for its lending services without rebuilding the codebase of Aave V3, reducing the development pressure and cost for Aave DAO.
Moreover, the outcome would also align with the failed idea from December 2023 by Aave’s lead developer, Marc Zeller2. Zeller suggested that Aave should explore Solana as a settlement layer for its lending pools, but the idea was rejected by the Aave community at that time.
I have been asked recently about Aave x solana.
A year ago not long after FTX collapse my opinion on it was very sharp.
Today my opinion hasn’t changed on deploying on L1 the potential ROI is simply not good enough to consider.
What has changed is my opinion to consider neon. pic.twitter.com/Op1CrxY7mu
— Marc “Chainsaw” Zeller 👻 💜 🦇🔊 (@lemiscate) December 27, 2023
Neon EVM is a breakthrough technology being developed on the Solana platform, aiming to combine the advantages of Ethereum Virtual Machine (EVM) and Solana. It promises to deliver a perfect blend of functionality and high performance of Solana with the popular Dapp development capability of Ethereum.
Aave is the leading decentralized lending protocol with a total value locked (TVL) of over $5 billion, integrating 10 blockchain networks, of which the lending pool on Ethereum accounts for more than $2.2 billion.
The combination of Neon EVM and Aave has the potential to bring a cross-chain future, an exciting opportunity to tap into the Solana DeFi market, thereby growing the user community, increasing the TVL and revenue of the protocol. Not only that, Neon EVM will also benefit from having a top DeFi project Aave on its platform to diversify and enhance the available DeFi options for the users in the Solana ecosystem.
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