[ARFC] Deployment of Aave on zkSync
Author: ACI
Date: 2024-06-10
Simple Summary
The current ARFC proposes deploying Aave V3 on zkSync to leverage the scalability and cost-efficiency of zk-Rollups. By integrating with zkSync, Aave can offer users faster and cheaper transactions while maintaining the security and decentralization of the Ethereum mainnet. This ARFC seeks governance approval for the deployment of an Aave V3 instance on the zkSync Era L2.
Motivation
zkSync is a Layer 2 scaling solution for Ethereum that utilizes zk-Rollups to batch multiple transactions off-chain and submit a single proof to the Ethereum mainnet. This approach significantly enhances transaction throughput and reduces gas fees. Deposit and borrowing activities can greatly benefit from the reduced transaction costs and increased throughput offered by zkSync.
Benefits of deploying to zkSync
- Reduce Gas Fees: By leveraging zkSync’s efficient transaction processing, users will incur significantly lower gas fees.
- Scalability: zkSync’s high throughput will allow Aave to scale effectively, accommodating more users and transactions without compromising performance.
- New Frontier & Opportunities: This deployment will offer the Aave DAO a new frontier for growth to explore and a new avenue path for GHO, our stablecoin.
- Interoperability: Due to zkSync infrastructure, an Aave V3 deployment in the zkSync Era can benefit other Aave family products, such as Lens on a segregated layer with GHO, making it a mutually beneficial relationship.
Specification
Proof of Liquidity (POL) and Deposit Commitments
- Aave DAO commits to redistribute to Aave users via liquidity mining, GHO secondary liquidity incentives, safety module deployments, or merit programs any airdrop provided by the zkSync ecosystem.
- ACI, on behalf of the Aave DAO, will coordinate any liquidity mining campaign on a zkSync Aave V3 deployment.
Risk Parameters
This section has been updated after @ChaosLabs & @LlamaRisk feedback
After Risk Service Providers feedback, the following Risk Parameters will be applied to the following assets:
| USDC | USDT | WETH | wstETH | |
|---|---|---|---|---|
| Isolation Mode | NO | NO | NO | NO |
| Enable Borrow | YES | YES | YES | YES |
| Enable Collateral | YES | YES | YES | YES |
| Emode Category | N/A | N/A | N/A | N/A |
| Loan To Value | 75% | 75% | 75% | 71% |
| Liquidation Threshold | 78% | 78% | 78% | 76% |
| Liquidation Bonus | 5% | 5% | 6% | 7% |
| Reserve Factor | 10% | 10% | 15% | 15% |
| Liquidation Protocol Fee | 10% | 10% | 10% | 10% |
| Borrow Cap | 900,000 | 2,700,000 | 800 | 50 |
| Supply Cap | 1,000,000 | 3,000,000 | 1,000 | 500 |
| Debt Ceiling | N/A | N/A | N/A | N/A |
| uOptimal | 90% | 90% | 80% | 45% |
| Base | 0% | 0% | 0% | 0% |
| Slope1 | 9% | 9% | 3.3% | 4.5% |
| Slope2 | 75% | 75% | 80% | 80% |
| Stable Borrowing | Disabled | Disabled | Disabled | Disabled |
| Flashloanable | YES | YES | YES | YES |
| Siloed Borrowing | NO | NO | NO | NO |
| Borrowable in Isolation | YES | YES | NO | NO |
Useful Links
Next Steps
- If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage.
- If the ARFC snapshot outcome is YAE, coordinate with BGDLabs and Catapulta service providers for an Aave V3 instance deployment on zkSync Era.
Disclaimer
This proposal is powered by Skywards. The Aave Chan Initiative is not directly affiliated with zkSync and did not receive compensation for creating this proposal.
Copyright
Copyright and related rights waived under CC0
