Author: Yangz, Techub News
Recently, Marc Zeller, founder of the Aave Chan Initiative (ACI), initiated a community proposal to adjust the risk parameters of Aave V2 and V3 on Polygon, and explicitly "encourage migration from Polygon." As the application with the highest TVL on Polygon (DeFillama data shows that at the time of writing, Polygon's total TVL was approximately $1.21 billion, of which approximately $450 million was provided by Aave), Aave's move immediately attracted industry attention and also triggered a verbal dispute between the Polygon team and the Aave team.
Polygon co-founder Sandeep Nailwal accused Aave's leadership of "sour grapes," saying that "this behavior is extremely monopolistic and anti-competitive, and is not in line with the spirit of Web3." Aave founder Stani Kulechov responded that Polygon's behavior was actually "the bad guy complaining first." In the face of widespread opposition from users, they quickly spread rumors and "blamed" Aave's leadership.
So, what is the root cause of this sudden quarrel? The reason is that it all stems from a Pre-PIP improvement proposal released by the Polygon community.
On December 12, Allez Labs drafted the proposal in collaboration with DeFi protocols Morpho and Yearn. The proposal states that there are currently about $1.3 billion in stablecoin reserves (DAI, USDC, and USDT) on the Polygon PoS cross-chain bridge that are idle, which is equivalent to about $70 million in annual revenue being wasted at the current benchmark lending rate. Therefore, the three proposed to deploy these stablecoin reserves into lending protocols with various yield strategies and launch a new ecological incentive program to expand the DeFi ecosystem of Polygon PoS and AggLayer.
Specifically, the proposal proposes to exchange DAI for Maker's sUSDS and deposit USDC and USDT in Morpho Vaults to earn returns. In addition, Allez Labs will act as a risk manager to conduct risk analysis on other possible Morpho Vaults. Yearn will act as the manager of the ecological incentive program, create a Polygon ecological Yearn Vault for each approved asset, and use the returns obtained from the Morpho market and sUSDS strategy to reward the depositors of these Vaults.
At first glance, there seems to be nothing wrong with this proposal. But in the eyes of Aave's leadership, there are "huge risks" hidden under this proposal. On the surface, as reflected in the various examples cited by Marc Zeller of cross-chain bridge vulnerabilities that have caused losses to the DeFi ecosystem, this proposal poses a financial security risk to Aave. Secondly, as you can see, the initiators of this proposal are the three main beneficiaries of this proposal. As the number one application in the TVL in the Polygon ecosystem, Aave may feel "ignored" or "betrayed."
In addition, Stani Kulechov pointed out in his response that this proposal was actually the result of a "secret collusion" between Polygon and the above three parties, and there are reports that Polygon has completed a huge token transaction as a result. Stani Kulechov said that Polygon users have expressed dissatisfaction with the proposal from the beginning, and the Polygon leadership only "hypocritically" said today that they do not support the proposal, but are just "making up excuses." In order to protect the security of user assets, Aave DAO proposed the "exit Polygon" proposal.
However, this proposal for "protecting user security" is "sour grapes" in the eyes of Polygon. In response to this matter, Polygon co-founder Sandeep Nailwal said that when this plan was first submitted for discussion, Aave leadership had lobbied hard to ensure that cross-chain funds were used for deployment in Aave. During the public request for proposals on the Polygon governance portal, Aave leadership also held several meetings and invited Polygon Labs leadership to various dinners and presentations to win the support of Polygon Labs and "select Aave" as a stakeholder in the cross-chain process. In addition, Aave also released relevant proposals, but it did not arouse widespread discussion in the Polygon community. In contrast, Morpho (Aave's main competitor)'s proposal received more support from community members.
Nailwal said Aave's "disregard for the security measures that are in place is more like sour grapes. Ironically, this move will harm the users it claims to protect and undermine their access to a stable and thriving DeFi ecosystem. It is hypocritical to claim to care about user security while trying to destabilize the ecosystem that so many users rely on."
In addition to the discussion on security, the quarrel between the two parties has also risen to attacks on their respective forms of governance. Marc Boiron, CEO of Polygon Labs, pointed out that Aave and its surrounding teams are "monopolies" and use dirty means to create fear. Boiron said that Marc Zeller sent him a private message yesterday, "trying to intimidate" that Aave DAO will definitely pass the "exit Polygon" proposal. Stani Kulechov said that Aave DAO only initiated discussions and took action to protect users. "It is inaccurate to characterize Aave DAO's proposal as anti-competitive behavior, and it diverts people's attention from the real problem, that is, user safety." Stani Kulechov said, "Aave supports immutable governance. Aave even allows the use of the project's own tokens for governance under a friendly fork policy. (On the contrary) If Polygon wants to have more control over cross-chain asset investment strategies, they can launch a tailor-made market."
At present, it seems that the proposal initiated by Allez Labs, Morpho and Yearn will not be passed, and it is unknown whether Aave will really withdraw from the Polygon ecosystem (Note: Lido has announced that it will gradually shut down its staking services on Polygon). Although this dispute will soon pass, the issues behind it are worth pondering. Regardless of whether there are false statements from both parties, from Aave's risk prevention to Polygon's ecological expansion, both parties are striving for the greatest interests for themselves and their users. So, in this industry where interests are paramount, can we only see competition but not symbiosis?
