Its pretty simple.
Things take time to be deployed. At Aave we consider security as the most important characteristic. This has been explained several times already that different parties involved need to do some stuff.
And Linea for example got proposed last year already, Sonic just a few days ago.
As @EzR3aL stated previously, and also other Service Providers, there is a process and that process takes time.
In the meantime, please see here a.DI Sonic path activation AIP, that will open for voting in 12h aprox. As mentioned already, it’s a technical pre-requirement for an activation vote of Aave v3 Sonic. If this AIP passes, next one, when ready, will be the Sonic AIP.
Hi @MarcZeller, did sonic team stop funding for migration incentives.?
Hello, Now that everything is ready to deploy, I would like to request @ChaosLabs and @LlamaRisk to update their risk parameters suggestions for this launch.
$S parameters are well below market parameters, and competition (silo, Euler) gives a 75% LTV to the asset; allowing only 35% seems unnecessary and conservative and will hurt Aave attractivity; Sonic is a strategic and important deployment for Aave.
Caps are disconnected from reality, both risk team have an history of being overly conservative for the sake of being conservative and we constantly run into caps limit being reach hurting the overall user experience and our growth.
Caps as currently set are simply non-realistic and hurtful in the context of large incentives prepared by Sonic for aave users. we expect a significant upgrade of these parameters.
We are simply tired of “paper” listings.
As Sonic is virtually ready to be deployed, we are keen to see this done as a high priority and not delay the launch of AIP more than needed.
Looking at this response from Marc, we’re wondering if there’s another dimension to be added to risk analyses: competitive assessment of parameters for assets on other venues. We obviously appreciate that a risk manager’s job is to ensure that Aave is not exposed to bad debt and that security and safety are maximised, but just providing this lens would go a long way in ensuring that we are able to maximise our competitive position and simultaneously preserve safety.
Since our initial assessment, the Sonic ecosystem has seen substantial growth in both user activity and liquidity. The bridging process, migration mechanics, and overall infrastructure have matured significantly, allowing us to revisit the parameters proposed in the previous analysis.
Our initial conservative approach was a prudent response to uncertainties surrounding migration mechanics, fee structures, and potential supply shifts between FTM and S. Given the absence of a guaranteed long-term 1:1 upgrade ratio and the risk of price dislocations due to transaction spam, prioritizing stability was the responsible course of action. From the outset, we explicitly stated that we would reassess our position as conditions improved.
In addition to those mechanics, which have now been mitigated, we want to emphasize how important the size of a DeFi ecosystem and the availability of proper tooling are to risk assessment. In the case of Sonic, its chain TVL increased 15× since our initial assessment, and its ecosystem grew significantly, from DEXes to Lending markets and additional tools such as DEX Aggregators.
Hence, we are now fulfilling that commitment and are prepared to adjust our parameters accordingly.
Over the last 40 days, since the publishing of the previous recommendation, the bridged supply of FTM to Sonic increased twofold to a current total bridged supply of 1.98B S. Sonic now represents over 60% of the previous FTM total supply.
One of the concerns in the previous recommendation was the potential for FTM supply expansions disrupting the market and S token exchange. However, the minting mechanisms behind Sonic have been clarified following our previous post. Specifically, six months after launch, Sonic will mint an additional 6% of its initial 3.175 billion supply for a dedicated airdrop program, with unclaimed tokens eventually burned. Over six years, an annual 1.5% is minted to support team growth and marketing initiatives, with unused portions also burned. Lastly, block rewards, initially covered by reallocated Fantom emissions, will begin at 1.75% after four years.
The most recent on-chain data shows that S is also being used significantly within the S DeFi ecosystem, with the wS supply growing to a current size of 257M wS. The asset has shown strong demand and transaction volume over the last month.
This growth in supply and demand is equally strong for the other two assets proposed for the initial listing, with USDC growing to roughly 92.4M of supply and WETH reaching a supply of 10,900.
USDC Supply and Usage
WETH Supply and Usage
In parallel with the surge in on-chain supply, the depth of liquidity on Sonic’s decentralized exchanges has grown as well, with the biggest DEXs now being Shadow Exchange and SwapX, with a combined TVL of $106M.
The majority of the DEX liquidity is currently concentrated within the pairs for ETH, wS, USDC, or their yield-bearing tokens: scUSD, scETH, and stS.
Across all available DEXs, the buy-side liquidity available for wS (S) has recently grown to roughly $12.5M between WETH and Stablecoin pairs, representing a 10x growth since the previous analysis.
WETH DEX liquidity grew significantly as well, with its buy-side reaching $4.5M within wS and stablecoins pools.
This very significant growth in liquidity and on-chain supply allows us to provide less conservative parameters for the assets being listed on the instance.
The significant growth in liquidity and chain utilization is partially driven by incentive programs. One of them being the Sonic Points Program, a point-based campaign that is set to distribute 200M S tokens to encourage bridging and the use of DeFi products on the network. This initiative not only includes DEX liquidity but is extended to multiple Dapps. As such, we expect this to be a significant incentive for users to bridge and supply Aave.
In addition to the Sonic official point programs, major protocols on Sonic, such as Shadow DEX and SwapX, are running liquidity mining programs, which are supporting the growth of DEX pools.
In light of these developments, we are preparing to provide updated parameters for WETH, USDC.e, and wS on Sonic’s Aave V3 deployment. These adjustments will reflect:
| Parameter | |||
|---|---|---|---|
| Asset | WETH | wS | USDC.e |
| Isolation Mode | No | No | No |
| Enable Borrow | Yes | Yes | Yes |
| Enable Collateral | Yes | Yes | Yes |
| Loan To Value | 80% | 68% | 75% |
| Liquidation Threshold | 83% | 70% | 78% |
| Liquidation Bonus | 6% | 10% | 5% |
| Reserve Factor | 15% | 15% | 10% |
| Liquidation Protocol Fee | 10% | 10% | 10% |
| Supply Cap | 3000 | 20,000,000 | 20,000,000 |
| Borrow Cap | 2750 | 10,000,000 | 19,000,000 |
| Debt Ceiling | - | - | - |
| UOptimal | 90% | 45% | 90% |
| Base | 0% | 0% | 0% |
| Slope1 | 2.7% | 7% | 9.5% |
| Slope2 | 80% | 300% | 40% |
| Stable Borrowing | No | No | No |
| Flashloanable | Yes | Yes | Yes |
| Siloed Borrowing | No | No | No |
| Borrowable in Isolation | No | No | Yes |
| E-Mode Category | N/A | N/A | N/A |
Chaos Labs has not been compensated by any third party for publishing this recommendation.
Copyright and related rights waived via CC0
We’re supportive of the parameters set forth by @ChaosLabs. Since our initial review in early January, the Sonic ecosystem has evolved significantly. We find that the proposed LT/LTV parameters for wS strike an effective balance between risk and protocol competitiveness.
The proposal for the Aave governance to activate Aave v3 Sonic has been created.
Voting will start in approximately 24h, and if approved, the pool activation will happen on Monday 3rd March.
Participate 
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