[TEMP CHECK] Aave V3 deployment on BNB Chain

Title: [TEMP CHECK] Aave V3 deployment on BNB Chain.

Author: @marczeller - Aave-Chan Initiative

Date: 2023-03-22

Simple Summary

This Temperature Check seeks community input on the possibility of deploying Aave V3 on the BNB Chain to expand Aave’s presence and tap into BNB Chain’s growing DeFi ecosystem and user base.


BNB Chain is a thriving blockchain with a strong DeFi ecosystem and a large user base. With a TVL of approximately $5 billion, BNB Chain is the third-largest chain by TVL. The chain has a diverse array of DeFi offerings, including prominent projects like PancakeSwap, Venus, and several others. Deploying Aave V3 on BNB Chain could provide opportunities for growth and collaboration between the Aave and BNB Chain communities.


Deploying Aave V3 on BNB Chain has the potential to benefit both Aave and BNB Chain ecosystems. Aave would gain access to BNB Chain’s user base, DeFi ecosystem, and the potential for additional revenue. BNB Chain would benefit from having a flagship DeFi project like Aave on its platform, further diversifying DeFi options available to its users.


This TEMP CHECK presents the Aave governance with the opportunity to deploy Aave V3 on the BNB Chain with a selection of suitable assets for collateral, including BNB, WBTC, BETH, WETH, USDC, and USDT. Suggested risk parameters for each asset are provided in the table below. The ACI invites risk service providers teams to provide feedback on them.

Isolation Mode NO NO NO NO NO NO
Enable Borrow NO NO NO NO YES YES
Enable Collateral YES YES YES YES YES YES
Emode Category N/A N/A N/A N/A N/A N/A
Loan To Value 65% 70% 60% 80% 82.5% 70%
Liquidation Threshold 70% 75% 70% 82.5% 85% 75%
Liquidation Bonus 10% 10% 5% 5% 5% 8.5%
Reserve Factor 10% 10% 15% 15% 10% 10%
Liquidation Protocol Fee 10% 10% 10% 10% 10% 10%
Borrow Cap N/A N/A N/A 80.000 20,000,000 20.000.000
Supply Cap 5,000,000 5,000 20,000 100,000 50,000,000 50,000,000
Debt Ceiling N/A N/A N/A N/A N/A N/A
uOptimal 75% 45% 45% 80% 80% 80%
Base 0% 0% 0% 0% 0% 0%
Slope1 6.1% 7% 7% 4.8% 4% 4%
Slope2 100% 300% 300% 80% 80% 80%


The Aave-Chan Initiative (ACI) is not compensated in any form by Binance & BNB for creating this Temperature Check proposal. This TEMP CHECK has been prepared solely to facilitate community discussion.
At the time of writing, the author owns ~75$ worth of assets on the BNB chain.

Next Steps

Temperature Check: Gather community feedback and assess sentiment towards the proposal of deploying Aave V3 on BNB Chain.

ARFC: If the Temperature Check Snapshot indicates positive sentiment, proceed to the ARFC stage for further discussion, risk parameter evaluation network analysis and finalization of the proposal.

AIP: If the ARFC stage Snapshot is successful, submit the proposal as an AIP for voting and on-chain governance approval.


Thanks for this post @MarcZeller! We are in favor of this proposal as we believe the risk rewards for the deployment on BNB chain would be great for Aave.

In tandem timing wise, we also like to supplement onto the initial parameters suggested above with some background on BNB Chain and arguments for why we should Deploy Aave v3 onto BNB Chain.

Important reasons why Aave v3 should be deployed to BNB Chain:

  1. Deploying onto BNB Chain would help Aave tap into the growing number of Defi apps that are currently populating the ecosystem. Most notably being the recent Uniswap v3 deployment.
  2. The chain offers high speeds, low fees, and low latency.
  3. There is yet to be a “blue chip” money market on BNB Chain. Hundreds of millions of dollars of “idle” liquidity is sitting around waiting for a trusted and reputable project to park funds into.
  4. Even with the recent bear, BNB Chain has done a great job at maintaining users & TVL, and are poised for immense growth in the near future.
  5. BNB Chain has unique features that can eventually enhance Aave v3’s functionality such as staking and cross-chain support.
  6. This would open up a unique and underserved region for Aave, being the APAC markets. Millions of unique users would be introduced and onboarded to Aave.
  7. BNB Chain has a strong and very passionate and active community. This would provide valuable feedback and support for our team and quickly identify pain points and issues if they were to arise.
  8. New markets and customer demographics would open the doors for a new set of investors. In addition to retail, many institutional investors would now also consider using Aave.
  9. Being home to many projects previously unconnected to, deploying on BNB Chain would provide many opportunities for collaboration and partnership with BNB native projects.

Further, we believe that BNB Chain is primed and represents a great time for a major well known money market to deploy onto.

From Aave’s perspective, we can expect:

  • Hundreds of million, if not billions of TVL, entering into the ecosystem. Emphasizing what we believe to be a critical lack of a “blue chip” and widely known money market; this will result in what we think will be a “mad dash” of funds being transferred over to Aave upon deployment
  • 1+ Million users testing and trying out Aave on BNB Chain for the first time
  • Synergies with Aave and Aave related products. Onboarding and marketing to millions of new potential customers.

Additionally, with many of the other proposals we have posted in the past with regards to deploying Aave v3 onto other chains, we like to add a holistic review and analysis of the chain in order to add some more context on the chain as a whole. Figured we’d add here as well to strengthen the proposal and add to above.

BNB Chain

BNB Chain is a decentralized Layer 1 blockchain that is compatible with Ethereum Virtual Machine (EVM) and employs Proof of Staked Authority (PoSA) as its consensus mechanism. Presently, the network has 26 active independent validators, and the goal is to increase this number in the near future. The BNB Chain comprises two interconnected chains: the BNB Beacon Chain (previously known as Binance Chain) and the BNB Smart Chain (previously known as Binance Smart Chain). The network is renowned for its short block time, with an average block time of 3 seconds, and low transaction fees.

As mentioned earlier, the BNB Chain has an extensive DeFi ecosystem, with the second largest Total Value Locked (TVL) after Ethereum. PancakeSwap, the DEX with the third highest TVL across chains, is the largest project in terms of volume and TVL, providing liquidity for numerous supported assets. Other DEXes such as BiSwap, DODO, and iZumi also play a significant role in enhancing the liquidity available on the chain. Venus is currently most prominent BNB lending project, ranking fourth in the list of biggest lending protocols.

Liquid Staking has also been gaining more traction since late last year, delivering new use cases to BNB holders. Wombat is the largest stableswap protocol on BNBChain, handling volumes of more than $500M on peak days. The trading volume of BNB DeFi Dapps is also among the highest across chains, strengthening the argument for the deployment of Aave onto BNB. It is also the chain that, in recent times, hosts the most daily active users, the most transactions, and the most unique active wallets.


  • As mentioned, at time of writing, BNB chain has over $7.5b in TVL. It is important to note that that this has held steady over much of this bear market.

  • BNB Chain maintains 1 million unique active addresses transacting each day and has had an average of about 4 million transactions per day in recent months.

  • There are over 1.5 million unique 1 day active addresses. In the last 7 days there have been 6.95 million unique active addresses and 25.6 million in the last 30 days.

  • The main assets by volume are BNB, BTC, ETH, CAKE, USDC, and USDT. @marczeller, we think looking into adding CAKE with lower parameters might be worthwhile. We propose for CAKE:
Risk Parameter CAKE
Isolation Mode NO
Enable Borrow NO
Enable Collateral YES
Emode Category N/A
Loan To Value 50%
Liquidation Threshold 55%
Liquidation Bonus 15%
Reserve Factor 20%
Liquidation Protocol Fee 10%
Borrow Cap 400,000
Supply Cap 1,000,000
Debt Ceiling N/A
uOptimal 75%
Base 0%
Slope1 10%
Slope2 150%

For specifics and analysis pre-deployment, we look forward to @gauntlet and @chaoslabs’s analysis on these initial markets and heed to their expertise.

Technical Specs

BNBChain prioritizes security and reliability. It is supported by several oracle platforms, including Chainlink, Pyth (through Wormhole), Binance Oracle, and The Graph. The network also has public RPCs like Nodereal, Ankr, InfStones, Quicknode, and Chainstack, and BSC Scan serves as the reference token tracker.

To maintain the security of the network and its smart contracts, BNBChain undergoes regular audits conducted by reputable security providers such as Quantstamp, PeckShield, VeriChain, CertiK, all of which are publicly available. Furthermore, BNBChain has several initiatives centered on security, such as Avenger DAO, a community-led project that aims to protect users from possible scams, malicious actors, and exploits.

With relation to bridging cross-chain governance, There are a variety of options available for Governance cross-chain infrastructure including: Layer Zero, Celer Stargate, and HyperLoop.


We believe launching with a CAKE market would be beneficial not only from a pure free market stance, but would also establish friendly connections with many BNB native projects and have positive externalities for the protocol as a whole.

Combining our recommendation to add in the BNB Chain Native $CAKE with @marczeller’s initial proposed assets gives us:

Isolation Mode NO NO NO NO NO NO NO
Enable Borrow NO NO NO NO NO YES YES
Emode Category N/A N/A N/A N/A N/A N/A N/A
Loan To Value 50% 65% 70% 60% 80% 82.5% 70%
Liquidation Threshold 55% 70% 75% 70% 82.5% 85% 75%
Liquidation Bonus 15% 10% 10% 5% 5% 5% 8.5%
Reserve Factor 20% 10% 10% 15% 15% 10% 10%
Liquidation Protocol Fee 10% 10% 10% 10% 10% 10% 10%
Borrow Cap 400,000 N/A N/A N/A 80.000 20,000,000 20.000.000
Supply Cap 1,000,000 5,000,000 5,000 20,000 100,000 50,000,000 50,000,000
Debt Ceiling N/A N/A N/A N/A N/A N/A N/A
uOptimal 75% 75% 45% 45% 80% 80% 80%
Base 0% 0% 0% 0% 0% 0% 0%
Slope1 10% 6.1% 7% 7% 4.8% 4% 4%
Slope2 150% 100% 300% 300% 80% 80% 80%

As mentioned, we look forward to further analysis by @gauntlet and @chaoslabs, and are very happy, @Marczeller, these discussions are circling back up and happening again! We look forward to the temperature check and discussion.


I am a user and full stack developer on BNB chain, and support this proposal. The BNB userbase is vast, which is a great opportunity for Aave. Aave is a highest tier project, which is a great opportunity for BNB chain. Win/win for both communities.


The deployment of Aave V3 on the Binance Smart Chain is an exciting development that will expand Aave’s reach and provide users with more options for accessing decentralized finance.

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Thanks for this proposal @MarcZeller, and for the additional information and recommendations @PennBlockchain. We will analyze and provide our recommendations for the initial set of assets and their parameter configurations.


We are in support of launching Aave V3 on BNB Chain and think it’ll be a great revenue driver for Aave with the chain’s level of DeFi activity!

We echo @PennBlockchain’s proposal to include CAKE as a launch asset, however, request to enable borrowing given the strong demand (see screenshot of CAKE on Venus below) for the asset.

Syrup Pools on PancakeSwap continuously offers rewards for CAKE stakers and we believe Aave can benefit from this by enabling borrowing with appropriate risk parameters suggested by our risk teams.


Adam here from BNB Chain, writing on behalf of the BNB Chain foundation we are humbled by this proposal and will be strongly supportive of making AAVE v3 a core lending protocol on BNB Chain if the DAO vote in favor of this proposal.


As always, thanks @MarcZeller and ACI for bringing forward such an exciting proposal for the Aave DAO.

I am in full support of deploying Aave V3 on BNB as many already have pointed out that it will lead to great revenue generation for the DAO.

However, I wish to express a broader concern that extends beyond the BNB temperature check to all temperature checks involving the deployment of Aave V3 on new chains:

At present, the Aave DAO relies on numerous contributors (Chaos, Gauntlet, BGD, Aave Co’s, Llama, ACI), who provide valuable services to the DAO at considerable expense. Launching Aave V3 on a new network, such as BNB, necessitates that these contributors incur extra costs to establish the appropriate infrastructure for maintaining the same level of service on the new chain.

The concern arises when these contributors seek contract renewals in the coming months and potentially request increased compensation to account for these additional deployments. It is possible that the revenue generated from these deployments might not be sufficient to offset the added cost to the DAO.

As a proactive measure, I suggest discussing the possibility of having core teams from the respective networks bear the short-term costs incurred by community contributors. This approach could be reevaluated once the market generates enough revenue to enable the DAO to absorb these additional costs.

This view applies to the zkEVM Temp Check as well as any future Aave V3 deployments as well.

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Hey @G-Blockchain,

Thanks for raising your concerns. We, at the ACI, acknowledge and appreciate your perspective. Our policy is to maintain a stable footing on the DAO budget, and if we expand our scope, it means we will take on more work without increasing costs in potential upcoming budgets.

Many of the tasks we perform and the models we use are replicable with new assets and blockchains, as the foundations are similar. Furthermore, with EVM or EVM-equivalent chains, the underlying technology remains the same, so there’s no reason, in our view, to justify additional costs.

We believe that by working efficiently and leveraging our existing knowledge, we can support Aave’s expansion to new networks while keeping costs under control.


Is ACI speaking for itself only or other contributors as well?

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ACI has no role in speaking for anybody but itself.


Rad proposal. In my opinion (worth not a lot but whatevz lol) I think it’s a cool idea but I feel like we should chill out in the future with additional chain expansions. I could cite exploitation such as Harmony but in reality the potential dilution of assets being across so many chains or removal of the idea of scarcity/exclusivity- or just how centralized BSC is in general along with BUSD and BNB.

Especially if we expand on the idea I remember in the past with cross-chain collateral/loans I think it’d be better to be on more decentralized networks/safe ESPECIALLY with all this shit going down with banks and exchanges.

Maybe wait a tiny bit before adding BCH and see how this market downturn is gonna play out? Aave does a really good job of protecting those that use the platform (in a decentralized manner) so I trust everyone’s judgment here on the thread.

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You have to keep in mind Portals is right around the corner, CCIP is already actively being tested by BGD since Oct. 22.
This all is needed for the “Aave Multiverse”. But token and parameter should be determined carefully. Thats where im definitely with you.
Have a nice evening


as we’re witnessing some form of consensus on BNB deployment, we’re escalating this proposal to snapshot stage.

If the snapshot successfully passes governance votes, the ARFC will be focused on asset onboardings, risk parameters & technical discussion for deployement.


Hey team,

Icy here – I lead BD at PancakeSwap.

We are happy to revisit the CAKE listing at a later date, and just wanted to float the idea of LPs as collateral. I understand that this was previously discussed, and may meaningfully benefit the Aave Deployment.

At the same time, we’re excited to have Aave on BNB Chain, and look forward to working with the expansive Aave Ecosystem! (If you’re as excited as I am, or think you could be, feel free to reach out to me on Twitter.)



I’m in favour of Aave deployment on BNB Chain. I recognize BNB Chain has a important TVL and been present on this chain can attract many new users to the protocol and increase revenue. It’s also a win for BNB Chain as it will give users a new trusted lending protocol and increase competition. But I have the following concerns.


USDT as collateral without isolation mode:

  • First, I was concern about accepting USDT as collateral without isolation mode. Cause currently it’s not enable on others Aave v3 Markets. So it’s create a contamination exposure to USDT for all other Aave Markets.
  • Yet based on Venus supply & borrow metrics we can seen that on BNB Chain USDT is more used than USDC where on other chain it’s the invert*. So, there is a potentially high demand for USDT supply and demand. Act as on other chain and restrict USDT to isolation stablecoin mode can be a cut on revenu.

According to this points, proposed LT and LTV seems well fit to be fair and accepted as initial proposed state.

Low number of validator.

I am also a little bit skeptical on the independence of the 26 validators.
Does someone have interesting resource regarding this other than bnbchain.org/en/staking ?

*Aave Market metrics.

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Gauntlet Risk Analysis

For our recommendations for the initial deployment on BSC, we consider a few main metrics for BNB, BTCB, WETH, USDC, USDT, CAKE, and BETH following our asset listing methodology.

Five of the six proposed assets have significant liquidity on BSC. BETH is the exception, with a 25% depth of less than $1M. We recommend that Aave V3 launch on BSC with BNB, BTCB, WETH, USDC, USDT, and CAKE as the initial assets, and wait to list BETH pending both the Shanghai upgrade and greater on-chain liquidity for the token.

A note on bridged assets

Some assets have multiple bridged versions on the BNB chain. For instance, there’s Binance-Peg USDC and also anyUSDC, both of which have significant on-chain market caps ($779M and $4.9M). We recommend the Binance-Peg version of all bridged tokens, as these are the versions with the highest circulating liquidity in all cases.

For the sake of clarity, here are all the token addresses we use in our analysis:

Recommended Initial Parameters

Isolation Mode YES NO NO NO NO NO
Borrowable in Isolation NO NO NO NO YES YES
Enable Collateral YES YES YES YES YES YES
Emode Category N/A N/A N/A N/A N/A N/A
Loan To Value 55.00% 70.00% 70.00% 80.00% 74.00% 75.00%
Liquidation Threshold 61.00% 75.00% 75.00% 82.50% 76.00% 80.00%
Liquidation Bonus 10.00% 10.00% 10.00% 10.00% 5.00% 5.00%
Reserve Factor 20.00% 20.00% 20.00% 15.00% 10.00% 10.00%
Liquidation Protocol Fee 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Borrow Cap 1,800,000 42,000 191 12,000.00 20,000,000* 20,000,000*
Supply Cap 5,300,000 46,000 372 12,000.00 50,000,000* 50,000,000*
Debt Ceiling $10,000,000 N/A N/A N/A N/A N/A
Stable Borrowing NO NO NO NO NO NO
uOptimal 45% 45% 45% 80% 90% 80%
Base 0% 0% 0% 1% 0% 0%
Slope1 7% 7% 7% 3.80% 4% 4%
Slope2 300% 300% 300% 80% 60% 75%

Borrow and Supply Caps

For initial supply and borrow caps, we use the lower of the conservative and aggressive recommendations generated under Gauntlet’s Borrow and Supply Cap Methodology.

*For USDT and USDC, our standard methodology would actually support higher caps than those in the proposal, but we cap them at 20M borrow cap and 50M supply cap.

Enable Borrowing

We recommend enabling borrowing for BTCB, ETH, USDC, and USDT. Conservative borrow caps are sufficient to mitigate the risk from borrowing.

Liquidation Threshold, Loan to Value, Isolation Mode

For BTCB, ETH, USDC, and USDT, we use the most conservative (lowest) LB and LTV of those assets on other chains.

BNB and CAKE are new assets. BNB, the native token of the BNB chain, is the 4th largest token by market cap, after BTC, ETH, and USDT, with a market cap of $49B. It has very significant on-chain liquidity, with a 25% depth of $65M. We recommend initially setting LT and LTV to 70% and 65% respectively, as a conservative starting point.

CAKE is the token for PancakeSwap, the leading DEX on the BNB chain. It is used for governance and staking. The CAKE token has substantial on-chain liquidity, with a 25% depth of $33M. CRV is a relevant comparable to CAKE, as both are DEX tokens with similar market caps ($686M for CAKE, $793M for CRV). CRV is listed on Ethereum Mainnet in isolation mode with LTV of 55% and LT of 61%. We recommend the same parameters for CAKE: isolation mode on, with LTV = 55% and LT = 1%. We recommend an initial debt ceiling of $10M for CAKE. Please see here for Gauntlet’s Isolation Mode methodology.

Liquidation Bonus

We recommend setting LB to 5% for stablecoin assets and 10% for non-stablecoin assets.

Reserve Factor

We recommend using the same Reserve Factors used on other chains for BTCB, ETH, USDC, and USDT. For the new tokens, BNB and CAKE, we recommend starting at 20%.

Interest Rate Curves

We recommend setting the interest rate curves for existing assets to the same values they have on other chains. For the new assets, BNB and CAKE, we recommend starting with the IR curves used for BTCB, as these are relatively conservative.

Borrowable in Isolation

We recommend allowing users to borrow the stablecoins, USDT and USDC, in isolation mode.

Supporting Data


Token 25% Depth (BNB Chain) 2% Depth (Combined CEX and DEX)
BNB $61,000,000 $11,000,000
BTCB $28,000,000 $3,400,000
WETH $23,000,000 $41,000,000
USDC $72,000,000 $150,000,000
USDT $75,000,000 $620,000,000
CAKE $18,000,000 $4,700,000
BETH $970,000 $290,000

25% depth figures reflect liquidity on Binance chain and are sourced from 1inch; we use USDC as the target currency for USDT, and USDT as the target currency for the other assets. 2% depth figures reflect liquidity across CEX and DEX sources and are sourced from Coingecko.


Token Circulating Supply (tokens) Net Top 5 Holders (tokens) Net Top 5 (% of Circulating Supply)
BNB 157,887,643 1,094,697 0.69%
BTCB 53,056 36,635 69.05%
WETH 120,457,776.00 275,982 0.23%
USDC 32,619,068,875 340,728,033 1.04%
USDT 80,004,564,803 525,953,021 0.66%
CAKE 380,101,073 319,053,004 83.94%
BETH 1,499,971 1,490,864 99.39%

Hey there, what’s the update regarding AAVE’s deployment on BNB Chain following BGD’s technical review?

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