Aave Co-Founder Criticizes Polygon Bridge Fund Proposal
According to Odaily, Aave co-founder Stani recently shared his views on a controversial proposal by the Polygon team regarding the investment of user funds from the Polygon bridge into decentralized finance (DeFi) without adequate risk protection. The proposal, developed with the assistance of undisclosed partners, has sparked dissatisfaction among Polygon users, who are concerned about the dual use of their funds, drawing parallels to fractional banking practices.Aave service providers, including risk providers, have been made aware of the proposal's implications, especially considering that 40% of Polygon's total value locked (TVL) is deposited in Aave. Aave's primary governance functions operate on Polygon, and the existing safety module provides insurance for the market on Polygon. This proposal significantly impacts Aave's risk management strategies. In response, Aave Chan Initiative (ACI) has initiated discussions to adjust risk parameters to safeguard user funds, taking into account past incidents like the Harmony bridge hack. Notable contributors, such as Andre Cronje, have also voiced similar concerns during governance discussions.The Polygon team has since retracted their proposal, attributing its failure to Aave's leadership and making inaccurate claims about Aave's infrastructure. Aave clarified that its infrastructure supports custom markets, as demonstrated by Lido's creation of one. Aave also supports immutable governance if needed and allows governance using one's own tokens under its friendly fork policy. If Polygon seeks better control over bridge asset investment strategies, it can easily establish a tailored market with additional security assurances, which other protocols lack. Aave is a flexible lending infrastructure and capital efficiency system designed to accommodate various use cases, with V4 expected to be an even more exciting product.The primary feedback from Polygon users is their dissatisfaction with the network's unauthorized use of their funds for high-risk investments. Aave's proactive discussions and actions to protect users align with the responsibilities of a decentralized autonomous organization (DAO). Characterizing Aave DAO's proposal as anti-competitive is inaccurate and diverts attention from the real issue: user safety. Aave DAO is not interested in inheriting third-party protocol risks without DAO consent, and ACI has taken necessary steps to define the future development of the Polygon market.Previously, the Aave community received a proposal from contributor team Aave Chan, led by founder Marc Zeller, to withdraw lending services from Polygon's PoS chain. This was in response to another proposal from the Polygon community to generate returns using over $1 billion in bridged assets. Zeller's proposal aims to phase out Aave's lending protocol to protect it from potential future security risks. He suggested adjusting risk parameters on Aave protocol versions 2 and 3 on the Polygon PoS chain to mitigate threats posed by bridged stablecoins and generate returns if Polygon's proposal is approved. His proposal recommends stringent measures to counter potential risks in the Aave lending market on the Polygon PoS chain, including setting a 0% loan-to-value ratio for all assets and increasing the reserve factor to 85%, effectively preventing further deposits or users from borrowing against collateral.