# \[Direct to AIP\] Onboard XPL on Aave V3 Plasma Instance **URL:** \ **Category:** New Asset\ **Created:** [October 2, 2025, 11:38am UTC](https://governance.aave.com/t/direct-to-aip-onboard-xpl-on-aave-v3-plasma-instance/23197 "2025-10-02T11:38:20Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![ACI](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/aci/32/4780_2.png) [@ACI](https://governance.aave.com/u/ACI)\ **Post date:** [October 2, 2025, 11:38am UTC](https://governance.aave.com/t/direct-to-aip-onboard-xpl-on-aave-v3-plasma-instance/23197/1 "2025-10-02T11:38:20Z")
## [Direct to AIP] Onboard XPL on Aave V3 Plasma Instance ## Author: ACI ## Date: 2025-10-02 > Proposal updated with latest Risk Params 2025-10-17 ### **Summary** This ARFC proposes to onboard XPL on Aave V3 Plasma Instance. This proposal will be a Direct to AIP. ### **Motivation** XPL is the native token of the Plasma blockchain. It was initially approved by governance for onboarding to the Plasma instance during the Plasma instance deployment yet was paused due to reservations of some service providers. Given there is now sufficient liquidity for the token we believe it is time to reconsider onboarding XPL to the Plasma instance. ### Risk Parameters Risk parameters will be provided by Risk Service Providers and the proposal will be updated accordingly. | **Parameter** | **Value** | | --- | --- | | Asset | WXPL | | Isolation Mode | No | | Borrowable | No | | Collateral Enabled | Yes | | Supply Cap | 14,000,000 | | Borrow Cap | - | | Debt Ceiling | - | | LTV | 0.05% | | LT | 0.1% | | Liquidation Bonus | 10% | | Liquidation Protocol Fee | 10% | | Variable Base | - | | Variable Slope1 | - | | Variable Slope2 | - | | Uoptimal | - | | Reserve Factor | - | ### **E-Mode** | **Parameter** | **Value** | **Value** | **Value** | | --- | --- | --- | --- | | Asset | WXPL | USDT0 | GHO | | Collateral | Yes | No | No | | Borrowable | No | Yes | Yes | | Max LTV | 50% | - | - | | Liquidation Threshold | 55% | - | - | | Liquidation Bonus | 10% | - | - | ### **Useful Links** [https://docs.pendle.finance/ProtocolMechanics/YieldTokenization/PT](https://docs.pendle.finance/ProtocolMechanics/YieldTokenization/PT) > [@\[ARFC\] Deploy Aave v3 on Plasma](https://governance.aave.com/t/arfc-deploy-aave-v3-on-plasma/21494): > > [ARFC] Deploy Aave v3 on Plasma Author: ACI Date: 2025-03-15 Proposal has been updated with latest Risk Parameters 2025-09-05 Simple Summary This ARFC proposes the deployment of an Aave V3 Instance on Plasma. Motivation Plasma is a high-performance, scalable, and secure blockchain purpose-built for stablecoins. Built from the ground up, it delivers zero fees, lightning-fast transactions, and the robust security that stablecoins like USD₮ require. The network offers a performant location… ### Disclaimer ACI is not directly affiliated with Plasma and did not receive compensation for the creation of this proposal. ### **Next Steps** 1. Publish proposal to gather community and Service Providers feedback. 2. Publish an AIP vote for final confirmation and enforcement of the proposal. ### Copyright Copyright and related rights waived under [CC0](https://creativecommons.org/publicdomain/zero/1.0/) ---
**Author:** ![LlamaRisk](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/llamarisk/32/12865_2.png) [@LlamaRisk](https://governance.aave.com/u/LlamaRisk)\ **Post date:** [October 7, 2025, 10:15am UTC](https://governance.aave.com/t/direct-to-aip-onboard-xpl-on-aave-v3-plasma-instance/23197/2 "2025-10-07T10:15:23Z")
## **Summary** LlamaRisks supports the onboarding of XPL to the Plasma instance. Wrapped XPL represents the network’s native token as an ERC20-compliant asset. Based on the WETH9, wXPL utilizes a well-established wrapper pattern. Approximately 7 million worth of wXPL (~$6.3M) could be swapped within a 10% price impact at the time of our analysis, with most DEX liquidity paired with USDT0. As of now, asset remains volatile, albeit the initial price discovery phase is over. A Chainlink XPL/USD price feed is available, and like WETH, the wXPL contract exhibits no admin or ownership functions and is non-upgradeable. ## **1. Asset Fundamental Characteristics** ### **1.1 Asset** XPL is Plasma’s native token, facilitating transactions and rewards to consensus validators. **[Wrapped XPL](https://plasmascan.to/token/0x6100E367285b01F48D07953803A2d8dCA5D19873/contract/code)** (wXPL) represents the ERC-20 compliant token. ### **1.2 Architecture** wXPL uses the Wrapped ETH pattern (WETH9) for the minting and burning of wXPL. ### **1.3 Tokenomics** By depositing native XPL into the contract, users can mint wXPL at a 1:1 ratio. Sending wXPL back to the contract redeems native XPL. XPL distribution is split: 25% investors, 25% team, 40% ecosystem and growth, and 10% to the public sale. This distribution centralizes half the token supply, with only 10% made immediately available to the public. ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/5/5018d7d0a416e3752020b66f2bc9f1a8ddaf91e2.png) _Source: **[XPL Allocation](https://docs.plasma.to/docs/get-started/xpl/tokenomics#xpl-distribution)**, Plasma Docs, October 6, 2025_ The planned unlock schedule for XPL that is not immediately made available from the mainnet launch includes: - XPL purchased by US investors, is subject to a 12-month lockup - 80% ecosystem and growth allocation (32% of the 40%) unlocks monthly over 3 years - ⅓ of the team and investor allocations are subject to a 1-year cliff, and the remaining ⅔ unlock monthly over 2 years ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/7a79d307c28eb0b1169eedb197a0e514509e74d0.jpeg) _Source: **[XPL](https://docs.plasma.to/docs/get-started/xpl/tokenomics#xpl-distribution)** Emissions Schedule, Plasma Docs, October 6, 2025_ #### **1.3.1 Token Holder Concentration** A total of 17,403 accounts hold ~43M wXPL. Using the Plasmascan explorer, we noted an irregular accounting of circulating wXPL supply, with over 116% of the supply attributed to a single contract and an underreporting of ~13M total supply. XPL supply is capped at 10B. ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/7e84bb366a8bc49e35b4cb3864089c69a3eaa5da.png) _Source: Top 100 Holders, **[Plasmascan](https://plasmascan.to/token/0x6100E367285b01F48D07953803A2d8dCA5D19873/tokenholderchart?type=erc20)**, October 5, 2025_ The 3 largest EOAs based on Coingecko circulating supply: - [EOA 1](https://intel.arkm.com/explorer/address/0xb4b898BD7e408d22683007d81E10f0C851C3a796), ~4.5% - [EOA 2](https://debank.com/profile/0xf078969e55cabf9ae3f26afeb5ec627b4430f19e), ~2.7% - [EOA 3](https://debank.com/profile/0x3c66fe4cb647f592ca8414cec9b79496988d8b4a), ~2.4% ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e12d2fad860595ec89259644eb99bc7534e2e084.png) _Source: Top 10 Holders, [Plasmascan](https://plasmascan.to/token/0x6100E367285b01F48D07953803A2d8dCA5D19873/tokenholderchart?type=erc20), October 5, 2025_ ## **2. Market Risk** ### **2.1 Liquidity** 7 million worth of wXPL (~$6.3M) can be sold on DEXs within a 10% price impact. Additional significant liquidity is residing on CEXs, however is not considered for onchain liquidation processing. ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/b75f1edb07a6e3665822ebd23ed37590a2982e1d.png) _Source: [Kyberswap](https://kyberswap.com/swap/plasma/wxpl-to-usdt0), October 5, 2025_ #### **2.1.1 Liquidity Venue Concentration** Meaningful XPL liquidity (\>$100K) can be found on Uniswap, Balancer, DYOR swap, and Lithos. The most significant pools from each venue include: - Uniswap: [USDT0/WXPL](https://www.geckoterminal.com/plasma/pools/0x8603c67b7cc056ef6981a9c709854c53b699fa66) (~$33.6M) - Balancer: [USDT0/WXPL](https://www.geckoterminal.com/plasma/pools/0xe14ba497a7c51f34896d327ec075f3f18210a270) (~$2.3M) - DYOR swap: [trillions/WXPL](https://www.geckoterminal.com/plasma/pools/0x638f567d445e60e1ac1afd369f53176fe9d5f93d) (~$777.7K) - Lithos: [USDT0/WXPL](https://www.geckoterminal.com/plasma/pools/0xa0926801a2abc718822a60d8fa1bc2a51fa09f1e) (~$666.7K) ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/793d166a80f0e9f05ac85001462494e2421a1916.png) _Source: [Geckotermina](https://www.geckoterminal.com/)l, October 6, 2025_ ### **2.2 Volatility** Shortly after Plasma’s mainnet launch on September 25, 2025, XPL saw initial sharp volatility. However, later the price saw a significant drop off, subduing at the range of $0.8-$1. 24-hour trading volume amounted to ~$47M on October 5th, 2025. ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/fa4ed6f853316959a8586843dc2fe45ce0df632c.png) _Source: XPL/USD Chart, [Coingecko](https://www.coingecko.com/en/coins/wrapped-xpl), October 6, 2025_ Inspecting Chainlink XPL/USD price feed, we can observe that after the initial price volatility subdued, the inter-update price changes are now limited to at most 4.5% in either direction. Even though the price saw a large drawdown post TGE, we can deem that the asset has now finalized the price discovery phase. Nonetheless, this data supports more conservative parameters, with specific attention to the liquidation bonus and LTV-to-LTV buffer in order to minimize possible liquidation stress. ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/9/91bf185ded0370908e3c353060a37e177c30da17.png) _Source: [Chainlink XPL/USD Feed](https://plasmascan.to/address/0xF932477C37715aE6657Ab884414Bd9876FE3f750), October 7, 2025_ ### **2.4 Growth** As the network’s native token, the growth of XPL should linearly follow usage growth on the network and applications. At the time of writing, ~43M XPL has been wrapped of the total circulating supply of 1.8B. ## **3. Technological Risk** ### **3.1 Smart Contract Risk** The WETH was developed as an open-source project by a team comprised of members from MakerDAO, 0x Labs, and Gnosis. The WETH9 contract represents a well-established and adopted pattern. As a widely used wrapper implementation, WETH code often forms part of protocol audits that integrate it, for example: - [Sherlock - EdgeLayer](https://github.com/sherlock-audit/2025-05-layeredge-judging/issues/107) (May, 2025) - [Openzepplin - Scroll](https://www.openzeppelin.com/news/scroll-phase-2-audit) (October, 2023) - [Dedaub - Maverick Protocol](https://dedaub.com/audits/maverick/maverick-pool-positions-mar-31-2023/) (March 2023) ### **3.2 Bug Bounty Program** No bug bounty could be found for wXPL. ### **3.3 Price Feed Risk** A Chainlink **[XPL/USD](https://plasmascan.to/address/0xF932477C37715aE6657Ab884414Bd9876FE3f750)** price feed is available, featuring a 0.5% deviation threshold and a 24-hour heartbeat. ### **3.4 Dependency Risk** The wXPL contract is based on WETH, with minor changes implemented. The only change effect was a change to the token metadata to reflect XPL. ## **4. Counterparty Risk** ### **4.1 Access Control Risk** The Wrapped XPL contract is a permissionless, non-upgradeable contract similar to WETH9. ## **Aave V3 Specific Parameters** The elevated asset price volatility and low maturity necessitate restricting the asset’s usage to stablecoins only. This cautious approach may be reconsidered as the asset matures. The initial parameters will be jointly posted with @ChaosLabs, who will then follow up on this thread. ## **Price feed Recommendation** We recommend using the [Chainlink XPL/USD](https://plasmascan.to/address/0xF932477C37715aE6657Ab884414Bd9876FE3f750) price feed to price the asset on Aave’s Plasma market. **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. ---
**Author:** ![ChaosLabs](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/chaoslabs/32/6850_2.png) [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)\ **Post date:** [October 16, 2025, 8:25pm UTC](https://governance.aave.com/t/direct-to-aip-onboard-xpl-on-aave-v3-plasma-instance/23197/3 "2025-10-16T20:25:23Z")
## Summary Chaos Labs supports listing WXPL on Aave V3’s Plasma instance. Below we present our analysis and initial risk parameter recommendations, designed to balance user utility with prudent protocol risk. ## Motivation Per our initial [assessment](https://governance.aave.com/t/arfc-deploy-aave-v3-on-plasma/21494/7#p-58726-summary-1) of the deployment of Aave V3 on Plasma, along with assets for initial listing, XPL was excluded due to concerns about high asset volatility, shallow liquidity, and actively ongoing price discovery. Elevated volatility would add substantial risk exposure to the protocol; hence, the decision to list the asset was delayed. Now, as XPL has matured, we are revisiting the assessment. ### Asset Overview XPL is Plasma’s native utility token, primarily used for transaction fees. Unlike bridged assets, XPL is issued natively and underpins the network’s security and economic alignment. [WXPL](https://plasmascan.to/token/0x6100E367285b01F48D07953803A2d8dCA5D19873/contract) is a wrapped ERC-20 representation of XPL, based on the WETH9 standard. As Plasma grows, we expect the XPL to play a progressively more significant role in further ecosystem development; listing the asset is expected to provide additional utility within the protocol. ### Dislocations To assess XPL’s market and pricing efficiency, we compare Chainlink Oracle price feed updates with the mean 1-minute prices from the WXPL/USDT0 Uniswap V3 [pool](https://plasmascan.to/address/0x8603c67b7cc056ef6981a9c709854c53b699fa66). Observed dislocations between the two sources have been substantial but decaying with time. Peak dislocation of approximately 50% was observed on October 10th, during the largest liquidation cascade in recent history. ![image (6)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/f851108ee463b2832c7344b11f19b4a6a15dac85.jpeg) Additionally, since October 12th, the dislocations have been consistently high, at times exceeding 10% and averaging 5%, further supporting the recommendation of conservative risk parameters and limited exposure to volatile asset borrowing. ![image (7)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/4/4f80ca3f1a556386adbba0f0331164005180af1e.png) ### Volatility During recent price discovery stages, XPL has exhibited high volatility. As the token was created and listed recently, we measured 24-hour annualized volatility instead of 30-day due to substantial limitations around DEX price availability. We observe that XPL’s volatility profile derived from CEX and DEX prices is slightly different due to some inefficiencies in pricing and, as previously shown, a substantial but decaying number of dislocations between the two venues. ![image (8)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/2/2df891a8b1e338d41d2da67528037fd5764950a7.jpeg) Additionally, we observe that the token’s volatility has been decreasing over the last week and has converged to 150-200% annualized. To put the number into context, ETH is currently at 50% annualized volatility, implying that WXPL is substantially more volatile over the same period, supporting the case for conservative risk parameters and Isolation Mode. ### Liquidity At the time of writing, the largest liquidity pool for XPL is the Uniswap V3 [WXPL/USDT0 pool](https://plasmascan.to/address/0x8603c67b7cc056ef6981a9c709854c53b699fa66), which has a TVL of over $20 million. While the pool size is significant, a sell order of 10 million WXPL tokens is estimated to incur a 15% slippage. Additionally, Plasma’s team has established a $300 million liquidation backstop to ensure timely execution of liquidations during periods of high market stress, which substantially reduces the risk of bad debt for the protocol. ### LTV, Liquidation Threshold, and Liquidation Bonus We expect XPL to continue exhibiting elevated volatility; hence, we recommend limiting its utility to a dedicated E-Mode. Specifically, we propose setting the LTV at 0.05%, the Liquidation Threshold at 0.1%, and the Liquidation Bonus at 10%. ### E-Mode We recommend listing WXPL in with a dedicated E-Mode to prevent it from being used as collateral to borrow other volatile assets. Significant price movements in borrowed asset prices, combined with potential dislocations of XPL’s on-chain price, delayed oracle updates, and XPL’s underlying volatility, could elevate the risks of liquidations and bad debt. Hence, we recommend limiting WXPL’s collateral utility to USDT0 and GHO for the time being. ### Supply and Borrow Caps We recommend an initial supply cap of 14,000,000 and initially listing WXPL as a non-borrowable asset. ### Oracle We recommend using an [XPL/USD price feed](https://plasmascan.to/address/0xF932477C37715aE6657Ab884414Bd9876FE3f750) with a 0.5% deviation threshold and a 24-hour heartbeat. The distribution of empirically observed oracle updates is presented below. While such configuration usually balances responsiveness with stability in the presence of market fluctuations, some irregularities in pricing have occurred during the market crash on October 10th, which was the case for a broad range of other volatile assets. ![image (9)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/db6ce2644b928509c10cf8e6cff34e88652df6da.jpeg) ## Specification | **Parameter** | **Value** | | --- | --- | | Asset | WXPL | | Isolation Mode | No | | Borrowable | No | | Collateral Enabled | Yes | | Supply Cap | 14,000,000 | | Borrow Cap | - | | Debt Ceiling | - | | LTV | 0.05% | | LT | 0.1% | | Liquidation Bonus | 10% | | Liquidation Protocol Fee | 10% | | Variable Base | - | | Variable Slope1 | - | | Variable Slope2 | - | | Uoptimal | - | | Reserve Factor | - | ### **E-Mode** | **Parameter** | **Value** | **Value** | **Value** | | --- | --- | --- | --- | | Asset | WXPL | USDT0 | GHO | | Collateral | Yes | No | No | | Borrowable | No | Yes | Yes | | Max LTV | 50% | - | - | | Liquidation Threshold | 55% | - | - | | Liquidation Bonus | 10% | - | - | ## Disclosure Chaos Labs has not been compensated by any third party for publishing this recommendation. ## Copyright Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain). ---
**Author:** ![ACI](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/aci/32/4780_2.png) [@ACI](https://governance.aave.com/u/ACI)\ **Post date:** [November 2, 2025, 7:56pm UTC](https://governance.aave.com/t/direct-to-aip-onboard-xpl-on-aave-v3-plasma-instance/23197/4 "2025-11-02T19:56:57Z")
GHO will be added to the e-mode in a separated AIP