[ARFC] Aave V3 Deployment on BNB Chain

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The Aave community is considering a proposal to deploy Aave V3 on the BNB Chain, aiming to leverage BNB Chain's DeFi ecosystem and user base with mixed community reactions regarding asset inclusion and risk management. The next step is to review an upcoming evaluation report before proceeding to a community snapshot vote to decide on the deployment.

What is this about?

The discussion revolves around a proposal by MarcZeller from the Aave-Chan Initiative to deploy Aave V3 on the BNB Chain. The proposal aims to capitalize on the DeFi ecosystem and user base of BNB Chain by including assets such as BNB, WBTC, BETH, WETH, USDC, and USDT as collateral options. The motivation behind this move is to provide Aave with access to BNB Chain's user base and potential revenue streams, while BNB Chain would benefit from hosting a flagship DeFi project. The proposal includes a detailed specification of assets and their risk parameters, a deployment checklist, and next steps that involve refining the proposal based on community feedback and moving towards a snapshot vote and deployment AIP.

How is the community reacting?

The community has provided mixed reactions to the proposal. Concerns were raised by Vix about the liquidity of BETH and its control by Binance. ChaosLabs and WintermuteGovernance supported the inclusion of several assets, including CAKE, and provided detailed analysis and recommendations for risk parameters. Portkey saw potential benefits in fostering growth and collaboration on the BNB Chain. Pumatheuma from Succinct expressed excitement about the multichain expansion and proposed a cross-chain governance communication solution. Wfu from Gauntlet provided a risk analysis and recommended initial parameters for asset deployment. Jengajojo raised concerns about the risks of centralization on the BNB Chain. MarcZeller responded to feedback and updated the community on the onboarded assets and their risk parameters. Bgdlabs confirmed they are working on an evaluation report, which is crucial for the next governance stage. Crypto_degen inquired about including LSTs such as BNBx and stkBNB in the deployment.

Why this is positive?

  • The deployment could provide Aave with access to a new user base and potential revenue on the BNB Chain.
  • Inclusion of CAKE could support the chain's largest protocol and offer significant revenue opportunities.
  • The proposal has received support from various community members and risk analysis providers, indicating a collaborative effort towards a safe deployment.
  • The proposal includes a comprehensive risk assessment and parameter setting for the included assets, ensuring a cautious approach to risk management.

Why this is negative?

  • Concerns about the liquidity of BETH and its control by Binance could pose risks to Aave's users.
  • The centralization of the BNB Chain and the possibility of it being halted by a centralized entity could pose risks to Aave DAO and its users.
  • The inclusion of certain assets like CAKE in isolation mode may limit their utility and the overall attractiveness of the Aave platform on the BNB Chain.

Next actions

The next action is to await the evaluation report from Bgdlabs, which will be crucial for moving the proposal to the next governance stage. Once the report is reviewed and any necessary adjustments are made, the proposal will likely be escalated to a snapshot vote for the Aave community to decide on the deployment of Aave V3 on the BNB Chain.

Posted 8 months ago

Last reply 11 days ago

Summary updated 10 days ago

Last updated 04/12 15:05