Summary
LlamaRisk supports the freezing of wstETH on the Plasma chain. The planned redeployment of the wstETH presents minimal impairment for users, given the low wstETH value currently on the chain and deposited on Aave.
Lido’s plan for a progressive implementation of the Cross-Chain Token (CCT) standard is expected to be rolled out to its other chain deployments over the coming months. This will represent a migration from other bridging mechanisms; the wider implications of this for Aave should be considered for the new version of wstETH being onboarded.
Understanding CCIP
Chainlinks Cross-Chain Interoperability Protocol (CCIP) enables the transfer of assets and information across blockchains. Utilizing Chainlink’s oracle networks, CCIP comprises three core capabilities: arbitrary messaging (encoded bytes, e.g., contract function calls), token transfers between networks, and programmable transfers (a combination of messaging and transfers).
Source: Chainlink, CCIP
CCIPs architecture consists of off-chain consensus and onchain execution components. The Decentralized Oracle Network (DON) of nodes represents the off-chain layer, while the onchain layer consists of router contracts, an on-ramp/off-ramp architecture for token minting and burning via the Cross-Chain Token standard (CCT), and message relays between chains.
CCIP’s design reflects Chainlink’s established architecture, which is utilized in the data feeds employed by Aave.
What this means for Aave
Onchain supply of wstETH is 0.12, with Plasma instance deposits ~0.04 wstETH ($172.09). A single EOA holds aPlawstETH. A freeze would represent a minimal impairment to the sole depositor and any potential depositors, given the low value and limited supply at stake.
The redeployment of wstETH and depreciation of the current deployment make it in Aave’s interest to prepare for the integration of wstETH, which will be supported by Lido.
Disclaimer
This review was independently prepared by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.
