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 of this sudden verbal spat? Ultimately, it all stems from a Pre-PIP improvement proposal issued by the Polygon community.
On December 12, Allez Labs collaborated with the DeFi protocol Morpho and Yearn to draft this proposal. The proposal states that approximately $1.3 billion in stablecoin reserves (DAI, USDC, and USDT) are currently idle on the Polygon PoS cross-chain bridge, which translates to approximately $70 million in wasted annual returns based on the current benchmark lending rates. Therefore, the three parties propose to deploy these stablecoin reserves into various yield strategies within lending protocols and launch new ecological incentive programs to expand the DeFi ecosystem of Polygon PoS and AggLayer.
Specifically, the proposal suggests exchanging DAI for Maker's sUSDS and depositing USDC and USDT into Morpho Vaults to earn returns. In addition, Allez Labs will act as the risk manager to analyze risks for other potential Morpho Vaults. Yearn will serve as the manager of the ecological incentive program, creating a Polygon ecological Yearn Vault for each approved asset, and using the returns obtained from the Morpho market and sUSDS strategies to reward the depositors of these Vaults.
At first glance, this proposal seems unproblematic. However, from Aave's leadership perspective, this proposal hides "huge risks." On the surface, as reflected in various examples of historical cross-chain bridge vulnerabilities causing losses to the DeFi ecosystem cited by Marc Zeller, this proposal poses a capital security risk to Aave. Secondly, as everyone can see, the initiators of this proposal are the three primary beneficiaries of it. As the application with the highest TVL ranking in the Polygon ecosystem, Aave may feel a sense of being "ignored" or "betrayed."
In addition, Stani Kulechov pointed out in his response that this proposal is actually the result of a "secret agreement" between Polygon and the aforementioned three parties, with reports suggesting that Polygon completed a large token transaction as a result. Stani Kulechov stated that Polygon users expressed dissatisfaction with the proposal from the beginning, and that the Polygon leadership today only "hypocritically" claimed to not support the proposal, merely "making excuses." To protect user asset safety, the Aave DAO proposed to "exit Polygon."
However, this proposal aimed at "protecting user safety" is viewed by Polygon as "sour grapes." Polygon co-founder Sandeep Nailwal stated in response to this matter that when this preliminary proposal was first submitted for discussion, Aave's leadership had strongly lobbied to ensure that cross-chain funds would be deployed in Aave. During the public request for proposals process on the Polygon governance portal, Aave's leadership also held multiple meetings and invited Polygon Labs leadership to various dinners and presentations to gain Polygon Labs' support and "choose Aave" as a stakeholder in the cross-chain process. In contrast, Aave also released related proposals, but they did not attract widespread discussion within the Polygon community. In comparison, the proposal from Morpho (Aave's main competitor) received more support from community members.
Nailwal said that Aave "ignores the security measures that are already in place, more like 'sour grapes' when they can't have it. Ironically, this move will harm the users it claims to protect, undermining their access to a stable and prosperous DeFi ecosystem. Claiming to care about user safety while trying to destabilize the ecosystem that so many users rely on is hypocritical."
In addition to discussions about security, the verbal spat between the two parties escalated to attacks on various forms of governance. Polygon Labs CEO Marc Boiron pointed out that Aave and its surrounding teams are "monopoly enterprises" that use dirty tactics to instill fear. Boiron stated that Marc Zeller sent him a private message yesterday, "attempting to intimidate" by saying that the Aave DAO would definitely pass a proposal to "exit Polygon." Stani Kulechov, on the other hand, stated that the Aave DAO is merely initiating discussions and taking action to protect users, asserting that "it is inaccurate to characterize the Aave DAO's proposal as anti-competitive, and it shifts focus away from the real issue, which is user safety." Stani Kulechov stated, "Aave supports immutable governance. Aave even allows project teams to use their own tokens for governance under a friendly fork policy. (In contrast) if Polygon wants to gain more control over cross-chain asset investment strategies, they could completely launch a tailored market."
Currently, it seems that the proposal initiated by Allez Labs, Morpho, and Yearn is unlikely to pass, and whether Aave will truly exit the Polygon ecosystem remains uncertain (note that Lido has announced it will gradually shut down its staking services on Polygon). While this dispute will soon pass, the underlying issues are worth pondering. Without considering whether either side has made false statements, both Aave's risk prevention and Polygon's ecological expansion are aiming to maximize benefits for themselves and their users. Therefore, in this profit-driven industry, is it only possible to see competition and not coexistence?
