In an exciting move to expand its presence and tap into the growing DeFi ecosystem of the Binance Smart Chain (BNB Chain), the Aave community has proposed the deployment of Aave V3 on the BNB Chain.
This proposal aims to foster collaboration between Aave and BNB Chain communities, opening up new opportunities for both ecosystems.
According to the governance proposal, Aave V3 will be deployed on the BNB Chain with a selection of suitable assets for collateral. The proposed collateral assets include BNB, WBTC, BETH, WETH, USDC, and USDT, representing a diverse range of popular tokens in the crypto space.
This move is expected to attract users from the BNB Chain community and leverage the growing DeFi ecosystem on BNB Chain.
The motivation behind this proposal is multifaceted. Aave stands to benefit from gaining access to BNB Chain’s large user base, DeFi ecosystem, and potential additional revenue streams.
On the other hand, BNB Chain would benefit from having a flagship DeFi project like Aave on its platform, further diversifying the DeFi options available to its users.
Proposed Risk Parameters For Aave V3
The proposed risk parameters for the collateral assets have been carefully considered, with inputs from risk service providers and feedback from its Aave community.
The risk parameters include loan-to-value ratios, liquidation thresholds, liquidation bonuses, reserve factors, and more. These risk parameters are crucial in maintaining the stability and security of the protocol on the BNB Chain.
The deployment of V3 on the BNB Chain would require a comprehensive checklist to ensure a smooth transition. It includes obtaining feedback and input from the community and risk service providers on the proposed risk parameters and deployment details.
Additionally, an infrastructure/technical evaluation report from BGD Labs, Oracle recommendation (Chainlink), and support from The Graph would be integrated into the proposal.
It’s worth mentioning that the Aave-Chan Initiative (ACI) has prepared this proposal solely to facilitate community discussion and is not compensated in any form by Binance & BNB.
As the proposal undergoes refinement based on community feedback and risk service provider recommendations, it will eventually be put up for a snapshot vote for final approval. If consensus is reached, a deployment AIP (Aave Improvement Proposal) will be submitted to activate V3 on the BNB Chain, as per the proposal.
This move by the community to deploy V3 on the BNB Chain with diverse collateral assets represents a strategic expansion of the protocol and a step toward further collaboration between both communities.
However, if successful, it could pave the way for increased adoption of Aave on the BNB Chain and contribute to the growth of the DeFi ecosystem as a whole.