ARC: Aave Deployment to L2 Optimism

Summary

I’m asking for signaling from the Aave community to accept a deployment of the Aave Protocol into Optimism.

Proposer

The Synthetix Ambassadors Council are co-proposing this, they are dedicated to supporting the Optimism ecosystem and related technologies. The council is part of Synthetix governance and is working with other Ethereum protocols to support the movement to Optimism.

Optimism is Layer 2 optimistic rollup on Ethereum, it has fast transactions much cheaper than the base layer, and it is EVM equivalent with base layer, meaning that any protocol can be deployed with no changes to the codebase.

Rationale

  • Current status of Optimism: The Optimism network is secured by Ethereum, the most decentralized web3 protocol and is scalable to tens or hundreds of thousands of participants. The ecosystem already has a slew of projects offering amms, synthetic derivatives, options trading, binary options, and more. Over $380m assets bridged from base layer. Protocols like Uniswap, Synthetix, Lyra, Thales, dHedge are already available. Protocols like Curve, Olympus DAO and otheare planning to be deployed on Optimism soon.
  • Why it is good for the Aave ecosystem: Ethereum is the most decentralized web3 network, Optimism and other Layer 2 protocols offer the best scalability solution that is native to Ethereum.
  • There is a Uniswap proposal to incentivize usage on Optimism by providing liquidity on several pairs.
12 Likes

Support the proposal to deploy to L2 Optimism. Afaik there is no lending/borrowing protocol and if deploy, we will be the first to capture the market share.

Possibility to enhance collaboration with protocols that are deployed at Optimism. For example Syntheix has today increased the max capacity of their L2 ETH wrapper to 3200 ETH. If some of the ETH is deposited into Aave, it benefits both protocols.

Aave V3 portal can also be another interesting feature that can be brought into the Optimism ecosystem.

All in all, support to deploy to Optimism. But which version to deploy will then be up for further deliberation.

1 Like

Really like the ARC, also been using Optimism for now and its promising and necessary for the future of ETH. My question would be if you are heading to deploy v2 or v3? I would prefer to see v3 there, but right now we don’t know when v3 will be deployed on ETH mainnet regarding the potential upcoming work from the license voting.
Or is there any alpha regarding “wen v3”?

I read on twitter yesterday that optimism would be delaying the Aave launch to enable them to launch on V3. They cited January 2022, so fingers crossed it is reality very soon.

1 Like

@Ivan Optimism and similar L2’s have created a net-benefit for the crypto ecosystem.

I welcome this proposal and the new influx of users (and cheaper fees) it would bring to Aave.

With this being on the Aave V3 roadmap are you looking to expedite this process?

I know SushiSwap has elected towards supporting Arbitrum. Optimism’s addition would work as a competitive advantage for Aave.

I agree with @EzR3aL’s idea and inquiry here:

While the faster the deployment on Aave the better, this is part of the V3 release and portal being co-pioneered by the @philippz team and will come with time.

3 Likes

+1 for deployment on Optimism.
About the version to deploy, I would say v3 is the natural candidate, and should fit also in terms of timeline.
Also, even if not completely appropriate for this thread, the community should start thinking on the deployment specifics of v3, in terms of initial risk parameters specially.

1 Like

Would really love to see AAVE on Optimistic Ethereum

V2 at first, V3 once it’s ready. They’d be the first lending protocol on OP

I’d propose to follow similar risk parameters to Polygon/AVAX launch. Same degree of risk.

I support this proposal. I have had nothing but positive experiences thus far on Optimism and would like to have the Aave protocol there so that I can deposit funds without bridging first.

Strongly support this effort. Optimism is ready to go!

As part of Aave multiverse strategy a deployment on Optimism makes sense, yet at the moment I’m concerned about the limited liquidity on this layer 2

There seems to be only $363m TVL, most of it on Synthetix (good SNX and sUSD liquidity) or Lyra (options) or Synapse (bridge) with just $35m of TVL for Uniswap with just over $8m WETH and nearly no liquidity of assets listed on Aave main market (LINK<$100k).

Liquidity is required to ensure collateral assets can be smoothly liquidated when needed requiring both some available liquidity and reasonable volume to limit price impact and slippage. Currently the only collateral assets with some liquidity are SNX and WETH

4 Likes

Probably the only way to deploy Aave there is to wait for Chainlink and finishing CCIP. Then this could be integrated into V1 or portals. This way liquidity would be cross chain and the current TVL wouldn’t be that necessary. But yes, at the moment there aren’t enough token that have enough liquidity to be used and probably wouldn’t be used even if gas fees are way lower on optimism.
So it only makes sense to wait, either for CCIP or way more TVL.

1 Like

Portals V0 doesn’t rely on CCIP but I’m confident decent amount of “cross-chain” liquidity can grow with Aave V3 there even with the limitations of V0.

Liquidity wasn’t great when Aave explored polygon, it’s a more than a decent ecosystem now.

1 Like