After a widely reported DAO voting, Ethereum is ready to welcome the debut of Aave V3 shortly. The decentralized lending protocol has submitted a proposal called “Aave Ethereum V3” and asked its community for votes to activate the Aave V3 Ethereum pool [3.0.1].
As per the proposal, the pool would list pre-approved tokens like WBTC, WETH, wstETH, USDC, DAI, LINK, and AAVE once the initial setup is finished.
A week prior, the platform’s team member Graham informed that the upgrade, which includes a host of new features such as cross-chain asset functions and community contribution tools, was set to occur this week, TronWeekly reported.
However, the highly-anticipated launch of Aave V3 got delayed as community members contemplated two main options:
One was to deploy new V3 contracts while maintaining the old V2, and the other was to update existing V2 contracts to the new V3 code.
Although technically challenging to achieve, upgrading would have allowed the protocol to retain the addresses of important contracts [such as Pool, Addresses Provider, tokens, debt tokens, etc.].
The second solution, which involved installing V3 contracts while leaving V2 contracts in place, was safer, but it required Aave users to transfer deposits to V3 instead.
Stani Kulechov, founder and CEO of Aave, wrote.
“Upgrading the Aave Protocol Ethereum V2 to V3 market directly would have indeed created some seamless experiences for the users, at the same time creates an event that would require a lot of security procedures and places substantial assets at risk.”
The community subsequently agreed with Kulechov and voted in favor of this option — deploying a new V3 pool instead — with 99.9% of voters opting for the latter.
The launch is being praised by other Eth DeFi players that use Aave’s protocol to access liquidity.
“A Big Step In Ethereum DeFi Space”
Kethfinex, a pseudonymous representative for Lido, a leading protocol in Ethereum DeFi that plugs into Aave, hailed it a “big step forward for the Eth DeFi space.”
Having said that, Ethereum retraced back to $1,530 in tandem with the broader market-wide dip. After ascending to $1671 on Jan 21, the second-largest crypto witnessed a sharp increase in massive profit-taking transactions before falling back by over 8%.
This drop, as per on-chain data provider Santiment, has led to a rise in ETH conversations that accounted for 21% of crypto asset discussions. “This FUD could benefit prices mid-term,” it noted.