Aave DAO Proposes White-Label Lending Protocol on Kraken’s Ink Blockchain
The Aave DAO is currently in the process of voting on a groundbreaking proposal to launch a white-label version of its renowned lending protocol on Kraken’s Ink blockchain. This initiative represents a significant milestone in the integration of decentralized finance (DeFi) with centralized platforms, marking a strategic partnership aimed at expanding adoption and introducing new revenue streams.
Initiated through a DAO proposal on July 17 via Snapshot, the deployment will utilize Aave’s smart contracts under a new brand managed by the Ink Foundation. The proposal has garnered overwhelming support from the Aave (AAVE) DAO, with over 790,000 votes in favor as of the upcoming July 21 deadline.
This endeavor will mark Aave’s inaugural white-label deployment, with plans to build the lending platform on Ink, an Ethereum (ETH) layer-2 network within the Optimism (OP) Superchain ecosystem. Through this collaboration, Kraken users will have access to onchain loans facilitated by Aave’s core lending infrastructure, centrally managed by the Ink Foundation.
The fusion of centralized oversight with DeFi architecture is intended to create a regulatory-friendly framework that could attract institutional users and serve as a bridge for Kraken’s existing user base to seamlessly access DeFi services. To incentivize adoption, the Ink Foundation intends to distribute 4% of its INK token supply to early users, while the Aave DAO will contribute AAVE tokens and its GHO stablecoin to seed liquidity.
The primary objective is to attract a minimum of $250 million in deposits to the platform, a lofty goal given that Ink’s current total value locked is currently under $10 million, significantly lower than competitors like Coinbase’s Base, which boasts over $3.7 billion in total value locked.
The proposed deployment presents a mutually beneficial opportunity for all parties involved. Ink stands to gain a flagship application to bolster its layer-2 presence, Kraken will enhance its product suite with a reliable DeFi backend, and Aave will diversify its revenue streams without compromising the core principles of its decentralized protocol.
Nevertheless, the Aave community is engaging in discussions regarding the governance implications and trade-offs associated with decentralization, given the centralized control wielded by the Ink Foundation. If approved, the platform will undergo a rigorous audit prior to launch, with Ink overseeing the user-facing tools.
Under an exclusivity agreement, Ink will be the sole white-label deployment partner for a minimum of one year, further solidifying the strategic nature of this partnership. Overall, the proposed white-label lending protocol on Kraken’s Ink blockchain represents a significant step towards bridging the gap between DeFi and centralized platforms, potentially opening up new avenues for growth and innovation in the crypto space.