The Ghost community is considering a proposal to withdraw the Aave lending protocol from Polygon’s Proof-of-Stake (PoS) chain. In a December 16 proposal, Aave Chan founder Marc Zeller highlighted risks associated with Polygon’s plans to rehypothecate stablecoin reserves. He recommended adjusting risk parameters for Aave’s V2 and V3 deployments on the Ethereum layer-2 blockchain and eventually exiting the network.
Zeller argued that this move would protect Aave from bridged stablecoin vulnerabilities and reduce long-term security threats. While Aave is Polygon’s largest decentralized application (dApp), accounting for $468 million or around 40% of the Ethereum layer-2 network’s total value locked (TVL), the proposed withdrawal would impact only 2% of Aave’s TVL and 1.5% of its fee revenue.
This decision follows a controversial yield generation proposal on the Polygon network, which has raised security concerns.
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