Decentralized finance protocols like Aave and its peers have a brand. Users/consumers know that Aave is a lending and borrowing protocol (aka “liquidity protocol”) where they can trustlessly borrow funds by putting up collateral or earn returns on their cryptoassets by committing them to the protocol.
Most brand name DeFi protocols got their start on Ethereum. However, the spread of L2s and other types of EVM-compatible scaling solutions have led to a rush among DeFi protocols to spread their brands to other chains. The goal is to increase the use of their protocol by tapping into the users and assets migrating or being created in these new ecosystems.
Linea is a “scalable L2 on top of Ethereum powered by a zkEVM tech stack incubated by Consensys” - the Ethereum-focused global blockchain development company that has developed widely used products like MetaMask, Infura, and Truffle. For more information on Linea, see their website and Docs.
Linea’s testnet is currently active and “has handled over 2 million transactions under private beta and over 33 million transactions under public beta.” Like Coinbase’s Base, Linea has a built-in distribution advantage in that it will be compatible and integrated with all of Consensys’ products at launch. Metamask, for example, has 30 million monthly active users.
The Proposal
Flipside, an active Aave delegate and contributor, and Consensys have started the proposal process to deploy Aave on Linea’s testnet and for Aave to join 100 other protocols and products as a “launch partner” for Linea’s mainnet later this month.
Flipside and Consensys make the case for Aave DAO voting to deploy on Linea’s testnet by touting (1) Linea’s expected distribution and scale, (2) the aligned values of the Linea and Aave projects and communities, (3) existing collaboration efforts such as the integration of the Lens tech stack into the Linea network, and (4) the focus on bridge security by the Consensys team.
According to the proposal, the Linea team will handle all of the technical work required to deploy Aave on its testnet.
Governance Process
For proposals to pass Aave governance, they must start in the forum, move to off-chain voting for a sentiment check (i.e. Temp Check) on the idea, come back to the forum as an official Aave Request for Comment (ARFC), pass off-chain voting again, and then move to an official on-chain vote, if necessary, as an AIP (Aave Improvement Proposal).
This proposal is currently in the Temp Check phase.
A voter can vote For, Against, or Abstain with AAVE or stkAAVE (staked AAVE) delegated to them. The quorum is 320,000 AAVE (or stkAAVE). At time of publication, 475,000 AAVE (or stkAAVE) have been voted. Current vote totals for each option (For, Against, Abstain) are currently hidden until the vote is over.
The vote will close on July 9, 2023 at 12:12pm EST.
Stakeholders
Proposer
There are two proposers of this Temp Check proposal: Flipside Crypto and Consensys. Flipside Crypto is a crypto data and governance firm that is an active delegate and contributor to Aave. Started in 2014, Consensys is a leading blockchain and web3 software company with a focus on Ethereum. Consensys’ research team spent more than 20 months on research and development related to Linea.
Supporters
There is near unanimous support for this proposal from the community. It seems to be a consensus view in Aave DAO that it is in the protocol’s interest to deploy to as many high quality L2’s as possible.
Opponents
No real opposition to this proposal has surfaced. At time of writing, one user @JengaJoJo asked about “the cost of deployment and maintenance vs potential fees that could be generated” despite being “[g]enerally in favor of this deployment.”
The Big Picture
The crypto universe is expanding and has been for some time. L2s like Linea, Base, Arbitrum, Optimism, and many others offer opportunities for the original DeFi protocols to expand their user base, attract more assets, and further cement their brands.
It seems clear that this proposal will pass the Temp Check vote as well as the subsequent governance steps. However, even if opposition to deploying on Linea mainnet materializes in the future, there is seemingly little risk in voting in favor of deploying to the testnet at this time.