[ARFC] Aave Deployment on Celo

Thank you for your comment @EzR3aL, really appreciate the time you have taken on reviewing this proposal. Let me add some additional information that should help address some of the issues you have raised:

  1. Growing Ecosystem -
  • Top 10 DAU Chain: Over the last 12 months, Celo’s daily active users have grown dramatically, averaging over 370,000 DAUs in recent weeks, placing Celo among the top 10 blockchains in terms of daily active users (Source: Token Terminal).
  • Opera MiniPay Wallet: Opera has integrated the MiniPay Stablecoin Wallet, built on Celo, within their mobile browser. The Opera browser is accessed by over 100 million monthly active users, primarily in Africa, providing a robust channel for seamless and secure mobile payments across the continent. MiniPay wallet launched in September 2023, and has exceeded 2M + users across Nigeria, Kenya, and Ghana. Since the users hold value in dollar stablecoins in the wallet, there is a large opportunity to add the Aave markets as a yield source to the growing MiniPay user base of 2 million+.
  • We expect Aave on Celo to be heavily utilized for real-world DeFi and ReFi use cases in emerging markets. Most of the users on Celo are retail consumers in markets such as Africa and Latam, many of whom were onboarded to Web3 through Celo. This makes Celo a unique distribution channel for Aave to expand its geographic presence as most of our user base is net new to Web3. This also means there should not be any overlap between Aave’s existing user base.
  • Given the above, an Aave deployment on Celo, with potential integrations of the lending market into projects such as the MiniPay wallet with its 2M+ users would likely 10x the DAUs on Aave, far exceeding the DAUs numbers on some of the other L1s and L2s
  1. Stablecoins
    There are multiple stablecoins in the Celo ecosystem. Some key aspects:
  • Native USDT and USDC Launch: Recent launches of native USDT and USDC have boosted liquidity and streamlined transactions within Celo’s ecosystem. There is already pent-up demand for yield on these stables which is clearly demonstrated by the fact that the only lending market on Celo (Moola Market) is tracking a borrow rate of ~26% on cUSD, one of the stable assets on the Mento Protocol that tracks the value of US Dollar. Since USDC and USDT are not listed on Moola, there is a clear opportunity for Aave to be the first lending market in the Celo ecosystem to list these stablecoins.
  • Gas Fee: Unique to Celo, users can pay gas fees in multiple ERC-20 tokens, including native USDT and USDC.
  • Forex Stablecoins: Celo has positioned itself as a major player in the stablecoin market, particularly focusing on emerging markets where stable assets are crucial for economic stability amidst hyperinflation and financial growth. Celo supports regional stablecoins such as cEUR, cREAL, and eXOF (tracking the Euro, Brazilian Real and West African Franc, respectively) and continues to expand its stablecoin offerings. This diversity extends the utility and reach of Aave markets on Celo as there is incredible potential for foreign currency exchange pairs on the lending market.

3. Real World Assets

Celo is a top 5 chain for RWAs: With the focus on real-world use cases, Celo has steadily emerged as the chain of choice for RWA projects including Centrifuge, Huma Finance, Jia, Untangled Finance, Zoth, and is constantly welcoming RWA protocols to the ecosystem. Aave 2030s increased focus on RWAs presents an opportunity for the Aave deployment on Celo to expand into RWA tokens, natural capital-backed assets such as tokenized carbon credit, and other ReFi assets, aligning with both organizations’ strategic focus.

4. Bridged Assets

Considering the recommendation of BGD Labs, you will notice that we have not added any bridged assets to our ARFC proposal. Our proposal is that Aave deploys on Celo with a selection of native assets, including CELO, USDC, USDT, cUSD, and cEUR.

Happy to jump on a call to discuss these further in detail. Thanks!