Founder of the decentralized finance (DeFi) lending protocol Aave, Stani Kulechov, shared a post on the social media platform X, revealing the upcoming launch of the first dedicated Aave market for the liquid staking solution Lido.
The announcement also emphasized that the Aave introduced the new Formal Request for Comments to gather opinions on the implementation of the “Lido Aave V3 instance.” It suggests Aave DAO cooperating with the Lido Alliance to deploy the Aave V3 instance specifically tailored for Lido.
Lido is in the process of initiating the establishment of the Lido Alliance, which is aimed at incentivizing innovative usage of staked ETH and fostering the expansion of its ecosystem. The document recommends Aave’s endorsement of the Lido Alliance’s initiatives through the implementation of the Aave V3 ETH market tailored for Lido. It will be configured to back stETH leverage loopers, exclusively incorporating wstETH and wETH with E-Mode enabled.
The Aave V3 instance under the Lido Alliance encompasses setting the borrow capitalization of wETH at 90% of supplied wETH, and the E-Mode LTV and LT adjusted 50 bps higher than other implementations, establishing it as an efficient looping platform. Furthermore, for the initial half of the year of Lido Alliance’s Aave V3 deployment, wETH slope1 is planned to be fixed at 2.50%, and wETH RF set at 10%. Additionally, the wstETH RF will be set at 5%.
Lido functions as a liquid staking platform supporting Ethereum and Polygon networks. It provides derivative token contracts designed for liquid staking and additional smart contract infrastructure to enable native token staking services.
First tailored Aave market for Lido is coming online. Aave V3 is flexible enough to cater any kind of risk configuration preferences based on specific needs. Expecting more similar custom markets evolve https://t.co/WfXun15HJZ
— Stani (@StaniKulechov) June 25, 2024
Aave Community Unanimously Votes In Favor Of Deploying Its Protocol On ZKsync
As a non-custodial liquidity market protocol, offering users the flexibility to participate as either liquidity suppliers or borrowers, Aave facilitates its suppliers to contribute assets to earn passive income through interest, while borrowers have the option to borrow funds leveraging perpetual or one-block liquidity methods.
Recently, Aave unanimously voted on an early proposal to deploy its lending protocol on the Ethereum Layer 2 network ZKsync in collaboration with service providers BGDLabs and Catapulta. The proposal, authored by the Aave Chan Initiative, passed with 662,000 ‘yes’ votes, indicating strong community support.
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