Introducing Aave V3

Amazing work from the Aave team, a lot of great developments and the Portal is a game changer.
Similar to @artdgn’s point No 3, I would be curious to understand how it works on the borrowing side. Is it possible to move both collateral and debt positions at the same time across chains?
Would it be possible to have a loan living on one chain and move the collateral to another chain without triggering liquidation (i.e. all your assets and debts are aggregated across chains and you can have cross chain liquidation)?

Wonderful write-up and summation of the new iteration, great work @Emilio.

Well done @Emilio - I’m excited to see V3 happen :)

Some things that come to mind I’d love to see devs build on top of V3

The ability to:

  • swap borrowed asset positions = e.g. borrow USDT - USDT borrow interest rate spikes - swap a percentage of borrowed USDT position for USDC

  • combine multiple wallet address borrowing/lending power = e.g. combine & manage multiple wallets from the one Aave dashboard

  • reallocate collateral + borrow/lend position to another wallet = e.g. you start your first Aave experience using Metamask - your assets & portfolio grow with the bull market - it would now be a great time to migrate to a hardware wallet - imagine you could do that without having to first pay off/withdraw all your assets - you just move it all to the hardware wallet in one go

  • allocate collateral borrow power, covering all blockchains = e.g. deposit WETH to Aave Protocol (market non-specified) - you can now borrow from any market

  • automate reward deposits = e.g. the ability to chose if your WAVAX rewards accumulate and you claim, or they automatically swap to AVAX & deposit as collateral, or they pay off your debt position (Alchemix style)

  • retain governance voting power with AAVE deposited as collateral

  • redirect a portion of rewards to a pool for funding Aave devs

  • redirect a portion of rewards to a pool for charities

  • tokenise debt positions = debt position as NFT

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Isn’t this the same thing that Instadapp does where you can migrate your positions from mainnet to Polygon? Since it is just transferring the aTokens, Aave will have complete control over those contract addresses on both sides. If governance is the one who has to approve the new bridges for use, then they’ll get access to use the bridge contracts to mint those aTokens. At least this is how I can envision it.

@Emilio Wow, I’m impressed with all these features!

No idea if you know the network Nahmii (https://www.nahmii.io) - after being for 4 years on the mainnet, they just launched their second version which is pretty impressive. The new version focusses an instant finality, predictable fees and scalability, a combination that others networks are missing (imho).

Any idea if you would be able to include this as a bridging network as well?

Oh shit this all sounds amazing!

Gauntlet is highly supportive of AAVE V3 and commends the AAVE core team for their continued innovation and leadership in the DeFi liquidity protocol space. We would like to highlight our thoughts below:

  • Portal / L2 features
    • Lending protocols provide value by facilitating connecting borrowers and lenders. As DeFi on Layer 2 continues to grow, ensuring that these different chains are able to work well together will allow AAVE to maximize usage across emerging chains. This will reduce liquidity fragmentation and in turn strengthen network effects for AAVE.
  • High Efficiency Mode (eMode)
    • Much of the risk posed to the AAVE protocol is determined by how quickly the value of a borrow position can change against the value of the collateral backing it. Right now, the amount of an asset a user can borrow per dollar of collateral is determined solely by the collateral type, without regard to the type of asset being borrowed. This means that a user’s maximum LTV is determined by the lowest common denominator asset on the protocol. Allowing certain pairs of assets whose prices are less likely to diverge is a great way to improve capital efficiency in the protocol with minimal added risk.
    • At the same time, we would need to watch out that this doesn’t just lead to an outsized increase in recursive farming if stable pools continue to be incentivized as they currently are.
  • Isolation Mode / New Risk Parameters
    • AAVE has always been at the forefront of listing new assets (for example, being one of the first protocols to list YFI). Isolation mode provides a way for AAVE to continue safely expanding to new assets while their volatility and liquidity are still improving.
    • The new risk parameters will also allow the protocol to grow more quickly and improve capital efficiency by allowing more levers for protocol contributors to manage risk and stakeholder incentives.
  • Risk Admins
    • AAVE V2’s current governance framework makes it such that recommendation implementations are delayed for roughly a week after the initial ARC is posted. On V3, permitted entities would be able to alter certain risk parameters without requiring a governance vote. This change is much needed, as a faster path for identifying and implementing parameter updates would allow AAVE to be more reactive to market conditions.
  • As with any change to the protocol, the implementation details will be important. For instance, building liquid and secure cross-chain bridges can be very difficult, so we’re looking forward to learning more about how the AAVE core team plans to address these challenges.

In short, we believe V3 will drive growth and strengthen risk management. We look forward to engaging in next steps.

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looking forward to the new features

Hey everyone, the snapshot was a success!
Everyone likes the new features. As first step of the launch strategy, a new forum discussion has been created here Aave V3 Launch strategy: Code licensing to determine the code licensing of Aave V3. This is an important discussion and a prime experiment in the space, so everyone participation is welcomed.

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Might I ask what is the expected release date of V3 and what is the status of v3 now? Thanks

Hello, V3 is in final stages of audits and an upcoming AIP will define the code Licence of V3

After this, there’s no bottleneck to deployment.

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I really appreciate the info and look forward to the release of V3

I have recently heard about that Aave V3 and V3’s proposed features highlight how DeFi is becoming increasingly cross-chain but it will kill the room for users , people wants open source instead of getting a license . This is something not expected from Aave,
I want growth that’s why I have to designate it

A couple questions on LTV across different chains/markets:

Currently on V2 (for example) $AAVE has a different LTV on each market

Firstly, why is this? How was that concluded?

Secondly, with V3 eMode - will the LTV now be consistent across all chains?

I was very happy when I heard about the AAVE V3 launch. I was expecting something better from AAVE but when I came to know that it won’t be an open source I felt bad for it. AAVE is digging its own grave. Me as an AAVE user I want you to change that decision to change its OS for all and don’t kill the room for growth. As a developer I must point out that this could potentially lay off many innovative projects with not much funding and redirect them to other chains, none the less on an open-source IDO will be cheaper due to low gas fees. Just like me many more people are sharing the same opinion and losing their faith in AAVE.

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So I just found out Aave V3 won’t go live with Portals because Chainlinks CCIP is still in development or in audit. Will this affect the V3 release or will v3 simply go live without Portal?
Because I think it could take month before CCIP is ready to be deployed.

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+1 watching :ghost:

Has there been an alternate to Chainlinks CCIP considered for V3?
Portal is one cornerstone feature.

So Emilio just said on Twitter it will be released within Q1

Come on guys, when will V3 be released? It’s been months and there’s no update from the team. We investors are so tired of this lazy work. You guys dont even have a deadline. This needs to stop immediately. V3 eoy or what??

lol who are you even? Its not been months. And i dont think the team is lazy at all. Guess you didn’t read what they are developing right?