StarkWare Proposes to Deploy Aave on its ZK-Rollup L2 StarkNet
A new proposal has been submitted to Aave’s governance forum that calls for deploying the DeFi lending protocol to StarkNet, StarkWare’s permissionless and decentralized ZK-Rollup.
Yael Doweck, product manager at StarkWare, submitted the proposal to onboard the protocol on behalf of StarkNet creator, much like MakerDAO has on its L2.
“With the success of the Polygon and Avalanche markets, deploying on StarkNet incurs additional value for Aave,” noted the proposal.
While Polygon was a sidechain that has its own security model, StarkNet is an L2 solution that brings Validity rollups added security on top of L1’s. As such, StarkNet aims to attract applications and users that would be hesitant to onboard to sidechains.
In addition to its security, StarkNet’s capital efficiency in terms of a shorter withdrawal period will allow this deployment to connect liquidity between networks efficiently, it said.
Currently, 14 DeFi and gaming applications have been built on StarkNet, and it also has a partnership with one of the leading centralized exchanges, OKEx.
StarkWare, the core StarkNet protocol developer, proposed co-funding this effort alongside the DAO on a 50/50 basis.
Aave is one of the leading decentralized finance protocols with $14.15 billion of assets locked in it, down from a $19.13 bln high from late October, making it the fourth-largest DeFi project. Meanwhile, its governance token AAVE is trading around $248, 62.5% off of its all-time high in May this year.
The DeFi project has also partnered with decentralized financing protocol Centrifuge to allow small and medium enterprises to access the liquidity available in the crypto market by tokenizing real-world assets. After tokenizing the likes of bridge loans, freight invoices, and trade receivables, among others, Aave will use those tokens as collateral.
“The RWA Market bridges the regulated world of TradFi to the trustless world of DeFi,” Centrifuge developer End Labs’ Co-founder Lucas Vogelsang said. “It’s a huge step for the Aave Protocol.”
The idea is to “allow Aave depositors to earn yield against stable, uncorrelated real-world collateral” by building a bridge between the DeFi capital and the real-world businesses. Meanwhile, Centrifuge issuers will be able to stake collateral and borrow from the market across a wide variety of asset classes.