title: [Direct to AIP] Add X Layer Loop Tool & Margin Trading to FlashBorrowers
author: @TokenLogic
created: 2026-08-28
Summary
This publication proposes adding the X Layer Loop Tool contract and the X Layer Margin Trading Product contract to the Aave V3 X Layer FlashBorrowers whitelist, allowing all contracts to access flash liquidity without incurring the Aave Flashloan Fee.
Motivation
X Layer has developed a Loop Tool to simplify position management and looping activity on the Aave V3 X Layer instance.
The Loop Tool will be integrated into OKX Wallet as a user facing product, allowing users to easily create leveraged positions on Aave without manually performing multiple supply, borrow and re-supply transactions. By streamlining the looping process, the tool is intended to reduce friction for users accessing Aave on X Layer and support greater borrowing and lending activity within the market.
X Layer has also requested that a separate contract supporting its margin trading product be added to the FlashBorrowers whitelist. This contract differs from the Loop Tool contract and supports retail margin trading activity on X Layer through OKX Wallet.
Certain transactions performed through the Loop Tool and margin trading product rely on Aave flash liquidity to execute the required position changes efficiently. Whitelisting the contracts as FlashBorrowers would remove the Flashloan Fee from these transactions, reducing execution costs for users and improving overall product efficiency. This should make looping and margin trading more accessible to users while encouraging greater usage of Aave V3 on X Layer.
The X Layer team has also confirmed that the whitelisted contracts will not be used by OKX’s / X Layer’s own liquidation bots. The contract is intended solely to support user facing looping and position management activity. X Layer’s own liquidation infrastructure is intended to act as a backstop rather than compete for liquidation flow. As such, the proposed fee waiver is not intended to provide OKX with a Flashloan Fee cost advantage over independent liquidators operating on Aave V3 X Layer.
This proposal provides a Flashloan Fee waiver only to the three specified contracts and does not change the existing reserve or risk parameters of the Aave V3 X Layer instance.
Specification
Whitelist the following X Layer Loop Tool contract as a FlashBorrower on the Aave V3 X Layer instance:
Upon implementation, the AIP will call addFlashBorrower() on the ACL_MANAGER contract for the Aave V3 X Layer instance, adding the address listed in the table above to the whitelist.
Once whitelisted, all contracts will be exempt from Flashloan Fees specifically on the Aave V3 X Layer instance.
Disclaimer
TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100086 and the KPI as outlined in this publication. The scope of this engagement is available via this forum proposal.
TokenLogic supports and maintains an independent delegate voting platform within the Aave community.
TokenLogic and associated entities have no undisclosed material conflicts of interest at the time of submission.
Next Steps
- Gather feedback from the community.
- Using the Direct-to-AIP process, escalate this proposal to the AIP Voting stage.
Copyright
Copyright and related rights waived via CC0.