Sonic, previously known as Fantom, has successfully completed the initial phase of launching Aave’s third-generation lending protocol on its blockchain.
A recent on-chain vote on Dec. 27 indicated strong community support for integrating Aave, the leading decentralized finance lending protocol, with the Sonic layer-1 network. The proposal was put forward by Aave Chain, a prominent delegate at the AaveDAO, and will now move to the Aave Request for Comment stage for feedback from governance members and service providers.
If the Aave Request for Comment process is successful, it will pave the way for a final Aave Improvement Proposal (AIP) vote to officially deploy Aave v3 on the Sonic blockchain.
Aave currently dominates the DeFi lending market with billions of dollars in total value locked, making its integration with Sonic a significant development. By launching on the Sonic layer-1 network, users will have access to on-chain credit lines and the ability to provide liquidity to other investors.
Sonic’s rebranding from Fantom and its high transaction capacity of 10,000 transactions per second, along with a fee monetization model to attract web3 developers, bode well for the deployment of Aave v3 on the platform.
In light of these developments, Aave is likely to withdraw its lending markets from Polygon due to concerns over a proposal that could expose Aave-native collateral to bad debt. Polygon co-founder Sandeep Nailwal accused Aave of anti-competitive behavior, but Aave’s founder and CEO, Stani Kulechov, defended the decision as a measure to protect user security.
Overall, the collaboration between Aave and Sonic represents a significant step forward for decentralized finance and the integration of innovative technologies in the blockchain space. The successful deployment of Aave v3 on the Sonic network has the potential to further enhance the DeFi ecosystem and provide users with new opportunities for lending and liquidity provision.