Donald Trump’s decentralized finance (DeFi) initiative, World Liberty Financial, is looking to integrate with Aave on Ethereum. The collaboration aims to establish a platform that sets new standards and advances the entire DeFi industry.
World Liberty Financial officially launched on September 18 and has garnered a lot of attention. However, questions remain about WLFI’s business model and tokenomics, which are unclear.
WLFI wants to integrate Aave v3
In a recent governance proposal, World Liberty Financial (WLFI) revealed its intention to integrate with Aave v3. According to the proposal, this would allow the DeFi initiative to provide liquidity for Ethereum, Wrapped Bitcoin, and stablecoins. Additionally, it could also extend to other digital assets.
“We are excited to announce that World Liberty Financial has officially posted our governance proposal on the Aave forum to launch an Aave V3 instance on Ethereum,” WLFI shared.
Trump’s WLFI initiative also aims to leverage his marketing efforts to promote DeFi to a wider audience. This includes a new class of users for over-collateralized lending and borrowing, for example. Thus, leveraging Aave’s strength as a market leader in decentralized lending to offer seamless user experiences for lending and borrowing against digital assets.
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Trump’s DeFi initiative will use the same reserve factor system as Aave’s main instance. Similarly, the Aave DAO will receive 20% of the protocol fees generated by World Liberty Financial’s Aave v3 instance. These plans suggest a symbiotic relationship between the World Liberty Financial and Aave protocols.
Furthermore, this integration could increase the user base of the Aave protocol. The Aave DAO will also receive around 7% of the total supply of WLFI tokens. Use cases for the token range from governance and liquidity mining to promoting the decentralization of the WLF platform. Additionally, a revenue share would be established using a trustless smart contract.
Platform wants to popularize DeFi
World Liberty Financial also envisions integrating assets that are incompatible with the mainstream market on Ethereum. To do so, it will leverage its ties to traditional finance (TradFi) and institutional investment. Whether all of this comes to fruition depends on the governance of Aave DAO and the approval of the WLFI community.
The intention to integrate with Aave was first demonstrated in early September, two weeks before the official debut of the DeFi initiative. The platform said it wanted to make crypto and America great again by driving mass adoption of stablecoins and DeFi.
“We are not just another hostile fork of Aave. History shows that doesn’t work. We are working with Aave, collaborating to create a platform that sets new standards and drives all of DeFi forward,” World Liberty Financial revealed.
As BeInCrypto reported, the launch failed to impress crypto investors, despite doubts about the project’s viability. There was skepticism about its business model, including how WLFI would operate and who its target customer base would be. Other concerns included how its decentralized lending protocol would generate revenue.
Perhaps the latest governance proposal can answer some of these concerns as the Aave DAO governance and WLFI community prepares to vote.
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AAVE Price Performance. Source: BeInCrypto
However, the Aave community has yet to express optimism about the integration. This is evident as the AAVE token is down 0.46% in line with the overall market stagnation. Data from BeInCrypto shows it is trading at $142.18 at the time of writing.
The article Trump’s DeFi Platform Proposes Integration with Aave – Understand appeared first on BeInCrypto Brasil.
