Deploy Aave V3 on Evmos

Evmos proposes deploying Aave v3 on the Evmos blockchain to expand lending to the Evmos and greater Cosmos ecosystem. Evmos will be the port of entry to Cosmos for Ethereum users and vice-versa with the introduction of developer-focused incentives, interoperability across other Cosmos chains and interchain composability.

Summary

Evmos is an application-agnostic chain that will be interoperable with the Ethereum mainnet, EVM-compatible environments, and other BFT chains via IBC, making it easy for users and developers to interact seamlessly between chains. Rather than being competitive with Ethereum, Evmos aims to expand the functionality of the EVM to offer interoperability that enables new use cases. EVM bridges (Nomad and Connext) will integrate with Evmos shortly after mainnet launch to allow Ethereum and other EVM chains’ ERC-20 tokens to be available on Evmos and subsequently the entire Cosmos ecosystem via IBC.

Evmos was founded by Federico Kunze Küllmer and Akash Khosla. Federico has been a core contributor to a number of Cosmos projects including Tendermint, Cosmos SDK, Core IBC, Gravity Bridge (formerly Peggy) and Sommelier. He has been building in the blockchain space since 2017 when he was an exchange student at UC Berkeley, where he joined Blockchain at Berkeley. Akash had been working in the Cosmos ecosystem at Anchorage and as a Co-Founder of Blockchain at Berkeley, the blockchain innovation hub where many of the original Cosmos developers started their careers. He’s been working on blockchain and cryptocurrencies since 2016 as a Software Engineer at Anchorage, Chain and Earn, in addition to contributing to open source projects like Interledger.

The Cosmos ecosystem has been growing steadily with new application-specific chains being launched every week. Interchain DEXes have been deployed on Cosmos, among which Osmosis is already the second-largest DEX token by Market Cap and is in the top 10 dexes by volume and TVL despite only being live for six months, which demonstrates the rapid growth of activity in Cosmos. By deploying to Evmos, AAVE will be able to capture a significant amount of user activity and fill the need for reliable lending protocols in Cosmos. Evmos will also enable cross-chain applications to leverage AAVE’s liquidity while being deployed to other Cosmos chains such as Terra. All of this growth will be further catalyzed by Evmos’ native usage incentives which will give the Evmos community the opportunity to allocate 25% of the block allocation of EVMOS tokens through governance to support AAVE’s growth and development. Additionally, funds from the community pool can be allocated to liquidity mining incentives through governance.

Motivation

There is great potential for synergy between Evmos and Aave. The Evmos ecosystem has been growing quickly with our live testnet and is launching with all of the infrastructure, tools and clients that developers require to deploy their contracts, including node and validator operator services, indexers, oracles, bridges and more.

Evmos goes above and beyond to align with developers and users through its tokenomics. Two key ways this alignment happens is through fee splits where EIP1559 is modified to give 50% of transaction fees to contract deployers rather than burning it as well as usage incentives which allocate 25% of all newly minted Evmos tokens to a usage incentive pool. This pool is fully controlled by governance enabling the community to allocate incentives for AAVE users. AAVE users have already been included in the Evmos RektDrop which rewards active Cosmos, Osmosis, and Ethereum users. You can read more about Evmos’ novel tokenomics and the RektDrop in our blog.

Specifications

  • What is the link between the author of the proposal and Evmos?

    • The author of this proposal is a core Evmos team member.
  • Provide a brief high-level overview of the project and the token:

    • With a launch planned for February 2022, Evmos is an application-agnostic chain that will be interoperable with the Ethereum mainnet, EVM-compatible environments, and other BFT chains via IBC, making it easy for users and developers to interact seamlessly between chains. Evmos aims to be the port of entry to Cosmos from Ethereum, making it easy to deploy smart contracts that expand interoperability with the Cosmos ecosystem.
    • Evmos’ native token, EVMOS, is used to secure the Evmos network through staking, to enable governance voting for network decisions, and to pay transactions fees on the network.

Evmos and Cosmos Ecosystem Metrics

  • >1,300 validators participated in the Evmos incentivized testnet

  • 3 native dexes coming to Evmos

  • Cosmos Ecosystem Market Cap is valued at over $124.5 billion collectively

  • Osmosis, the primary interchain DEX of Cosmos has the second highest market cap for DEX tokens, being surpassed only by Uniswap

    • Osmosis has a TVL of $1.2B
  • IBC usage growth with over 5M IBC transactions over the last 30 days and 600 channels and IBC-enabled chains have a market cap of over $56 billion.

  • Over 30 IBC-enabled chains with many more launching in early 2022

Audience data

  • Twitter (@EvmosOrg): 31K
  • Telegram (@EvmosOrg): 6.4K
  • Discord (discord.gg/evmos): 25.6K

Incentives

One of the key designs Evmos focused on is offering developer and user incentives natively. While many protocols deploy funds from foundations and make unilateral decisions of which protocols should benefit from them, Evmos offers a governance-controlled usage incentives pool which is funded by 25% of the block emission. This enables the community to allocate a portion of usage incentives to AAVE users to encourage organic growth of the protocol and increase its adoption.

In 4 years, this will total 200 million Evmos tokens. The size of this pool is large because users are the backbone of any crypto project. Usage Incentive rewards are based on gas spent on contract interactions and rewards are distributed at the end of each epoch (1-week).

In addition to Usage Rewards, token holders can leverage governance on Evmos to allocate a portion of the community pool to additional liquidity mining rewards. The community pool accounts for 10% of the supply which can be used to fund incentive programs.

Technical Specifications

Evmos will have support for The Graph, Gnosis Safe, and we are actively working with Chainlink to finalize support to enable a fully functional Aave v3 deployment by mainnet.

Initial Supported Assets

  • USDC
  • USDT
  • DAI
  • FRAX
  • AAVE
  • WETH
  • WBTC
  • OSMO
  • EVMOS
  • ATOM

Snapshot
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5 Likes

@akhosla, excited to see the EVM arm of Cosmos coming to and choosing Aave.

Due to the recent excitement around IBC and its expansive network, this would be a beneficial add to V3 and users on the protocol.

A few questions about Evmos integration across ETH protocols - have you pioneered proposals elsewhere?

2nd - is there a world where Evmos sees more use than Cosmos? Or is its use is directly proportional to the success and popularity of Cosmos?

1 Like

From a of cosmos ecosystem fun perspective, my take on 2nd question is
TLDR: possible Evmos has more use than cosmos (hub, or all ibc chains combined excluding Terra since Terra already has a large user base).

Evmos will not be tied to cosmos (the broader IBC enabled chains, or the cosmos hub specifically) as close as rollup to L1, IBC chains are more like each one develops itself ecosystem meanwhile able to communicate in a relatively trust minimized way (since IBC is based on tendermint light client verification), but every chain has different security level since validator set is self recruited.
However I do think relation between IBC chains are closer compare to all EVM chains, cause the expertise is relatively more diverse in cosmos (lots of non defi / nft app chains) but in the end every chain contributes to cosmos ecosystem at will

What are 3 native dexes coming to Evmos?

Hey Fig, Liam here from the Evmos team. We certainly share in your excitement of bringing IBC to AAVE!

AAVE is our first public proposal and we have many more coming in the following months. As huge fans of AAVE, we wanted to start with this amazing community.

As for usage, I think it will be interesting to see. Personally, since Evmos is an application agnostic chain, I wouldn’t be surprised if Evmos had more usage than application specific chains. Over time the Evmos ecosystem will likely expand beyond a single chain to include Cevmos and application specific chains that rely on Evmos for shared resources!

Definitely agreed with the sentiment that it is not a matter of competition, but rather how we can grow the overall cosmos ecosystem!

One is a Balancer V1 fork called Metalancer. The other is a UniV2 fork called Diffusion. The third is also a UniV2 fork and I don’t believe it has a name yet but I’ll double check :slight_smile:

1 Like

Blockchain @ Berkeley is in support of deploying Aave on new networks and the greater Cosmos ecosystem. We are curious though why the initial supported assets were chosen over others though for the lending pools to start it off. For example, including FRAX over other tokens

1 Like

Hey Annamira, great question. The main reason for selecting the mentioned assets is because as a new protocol we will have a limitted number of supported assets to begin with and we wanted to focus on those. Most of the mentioned Ethereum-based assets also make up som of the largest liquidity pools on the Ethereum mainnet deployment. As new projects go live on Evmos, we will explore supporting additional tokens.

FRAX in particular made the list because we have been working with Sam Kazemian to have the Frax contracts natively deployed to Evmos. This is in partnership with Nomad which will bridge Frax from other EVMs. Also, Frax will be one of the main stables supporting NovaDAO coming to Evmos meaning that there should be ample liquidity.

Hi, I am in support of Aave being deployed on Evmos, however I am unclear on how we will handle governance interoperability (if at all). What is the plan in having both Cosmos and Ethereum versions of Aave be governed by the same voting process? How will the implementation of passed proposals be handled on the separate chains? Will we simply rely on some trusted authority to link the two versions of Aave? I’m aware Aave has been deployed on L1s before - could someone clarify what the governance structure for past deployments is like and what it will be like for Evmos?

2 Likes

Great question. I think native governance interoperability is possible with some of our bridging options. I can’t speak for other chains and how they’ve handled it but our ideal is to eventually have Ethereum and Evmos talk as if they are neighbors with interchain/bridge composability on the EVM.