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HomeMoneyFirst cross-chain governance proposal passes on Aave

First cross-chain governance proposal passes on Aave

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Aave, a decentralized lending system is one of the emerging  Defi cryptocurrencies. It allows its users to earn, borrow, and Bitcoin Regulation assets excluding the intervention of a third party or middlemen. It operates on the Ethereum blockchain, and a person or a specific institution does not need to be trusted by its users because it is a system of smart contracts.

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The creation of lending pools is enabled by Aave’s software thereby allowing users to borrow or lend 17 different cryptocurrencies with ETH, MANA, BAT inclusive. Collateral must be posted by its borrowers before they can have access to borrow up to the worth of the collateral posted.

On the 18th of November, 2020, Aave posted that they have submitted two new Aave Improvement Protocols (AIPs) for governance vote on its official Twitter page. The post concluded that Aave and stakeholders can now vote on AIP2 and AIP3.

Approval of Proposal

The first cross-chain governance proposal in Aave’s ecosystem has been successfully approved. This was made known to the public after a post from Aave’s official Twitter page declaring its approval and the listing of some new assets.

In another post, the three steps in which the cross-chain transaction would flow were listed with a picture with arrows showing the movement from Ethereum’s existing Aave governance process to Polygon. The steps are listed below

  • Aave Ethereum based governance
  • Polygon’s FxPortal
  • Aave cross-chain governance bridge on Polygon

It was revealed by the project’s developer that the execution of Aave’s proposal which was designed on the Ethereum channel has been transferred to Polygon FxPortal. It was after Ethereum’s data was interpreted by the system that the verification and validation on the polygon network commenced for the completion of the process.

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Not long after, the data transferred from the Polygon network was accepted by the Aave cross-chain governance after it was being decoded, followed due process, and held for a while for the final process.

Aave is packed with an excessive number of unprecedented features. Amongst all the brands working for the Defi community, Aave is one of the most trusted. A report on data analysis by Defi Llama, revealed that in the Aave ecosystem, an amount of approximately $12 billion is the total value locked. This shows the level of popularity the firm has in the Defi cluster

Aave ecosystem Defi cryptocurrencies

A post was released by the development leg of Aave that the channel is designed considering the industry’s requirements. The product performs better when it is in synchronization with chains that support the cross-chain interoperability and Ethereum Virtual Machine (EVM) protocol. Some of the new tokens launched on the portal include CRV, BAL, GHST, LINK, SUSHI, and DPI.

Currently, Aave supports contracts linking to Ethereum’s Arbitrum channel and Polygon Network. Users can submit Aave Improvement protocols (AIPs) in a bid to target different features on the Defi platform. Take, for instance, an AIP was submitted by Gauntlet Network last October in an attempt to disable borrowing functions for Defi Index tokens and xSUSHI along with an Automated Market Maker (AMM) liquidity providing token pair. Four days after submission, the proposal was passed with 710,327 votes in favor of it.

The amazing update made some blockchain enthusiasts celebrate the achievement of the firm on their social media platform. However, the development of cross-chain over the channel did not favor some enthusiasts. Vitalik Buterin, the Ethereum co-founder, made his dissatisfaction known with cross-chain applications which have been making waves in the industry.

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Moreover, he warned that the configuration of the cross-chain chain solutions can lead to a sudden strong rise in the project’s vulnerability. The system can easily be impeded by hackers by launching 51% attacks on a single network, particularly small-capital rationalization level projects.

In conclusion, there has been a massive increase in the pricetokensave token since it launched in 2017 from an initial price of $1.76 to about $400. Aave is paving the way for an accessible and more open financial system as a decentralized money market. According to a report, the lending and borrowing platform has convincingly attracted $25 billion of pledged cryptocurrency since its launch in January 2020.

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