[TEMP CHECK] Aave V3 deployment on Fraxtal Mainnet

Governance New Market
1

Title: [TEMP CHECK] Aave V3 deployment on Fraxtal Mainnet
Author: @0xlide - @SaucyBlock + Nader - Frax Core Team
Date:2024-02-23

Summary

This TEMP CHECK propose deploying Aave V3 MVP on Fraxtal Mainnet in order to allow Aave to establish a strategic position in the Fraxtal ecosystem.

Motivation

Aave currently lists pools with a total value exceeding 7 million dollar, including aFRAX, aArbFRAX, aAvaFRAX, and soon, new assets like sfrxETH, sFRAX are also scheduled to be listed. Deploying Aave V3 MVP on Fraxtal is expected to bring further synergies with the Frax Ecosystem and Other DeFi on Fraxtal.

Fraxtal is built as an Ethereum Layer 2 Blockchain , with the security, stability, and scalability needed to power smart contracts with a strong emphasis on decentralized finance. The scope of Fraxtal is not appchain for Frax Finance, it is as big as Arbitrum, Optimism, zkSync, etc.

Additionally, Fraxtal’s blockspace incentive feature, called Flox, makes it stand out among other layer 2s.Users and developers using the chain and paying for the blockspace stand to earn a constant yield through the incentive program and the weekly FXTL point gauge system.

Proof of Liquidity (POL) and Deposit Commitments

Frax Finance supports the integration of Aave on the Fraxtal ecosystem, focusing on enhancing liquidity and user engagement through flexible and adaptive measures. Our approach includes the potential use of Automated Market Operator (AMO) allocations and the application of Fraxtal points to incentivize liquidity mining programs. This strategy is designed to align with the evolving needs of the ecosystem, ensuring that support is provided in a manner that contributes to the vibrant and sustainable growth of Aave on Fraxtal. By leveraging these mechanisms, Frax Finance aims to foster a conducive environment for lending and borrowing activities, underlining our commitment to the success of the Aave deployment and the broader DeFi community.

Reference

Project: https://www.frax.com/
Ecosystem: https://www.frax.com/ecosystem
Docs: https://docs.frax.com/fraxtal
Github: https://github.com/FraxFinance/fraxtal-node
Fraxscan: https://fraxscan.com/
Bridge: coming soon*
Audit: https://docs.frax.finance/other/audits
Twitter: https://twitter.com/fraxfinance

Next Step

  1. If consensus is reached on this [TEMP CHECK], escalate this proposal to the Snapshot stage.
  2. If the Snapshot outcome is YAE, this proposal will be escalated to ARFC stage
  3. Publication of a standard ARFC, collect community & service providers feedback before escalating proposal to ARFC snapshot stage
  4. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal

Disclaimer

Saucy Block is not directly affiliated with Frax Finance and has not received compensation for the creation of this proposal. At the time of writing, 0xlide holds small amounts of aArbFRAX and veFXS.

The co-author is Head of Governance at Frax Finance.

Copyright

Copyright and related rights waived via CC0.

7 Likes
2

Thanks @SaucyBlock,

Could you or Nader shed any light on the timeline to chainlink oracle deployment on the network?

1 Like
3

Chainlink Oracle will deploy soon, probably by mid-March.
*RedStone Oracle is already available.

1 Like
4

This proposal has been escalated to TEMP CHECK Snapshot.

2 Likes
5

A few questions about this proposal:

  • Could you provide further details about the benefits of Fraxtal points / incentives and how they will be used by the Aave DAO? Before deploying on another chain, especially that of a potential large competitor (while the mechanisms of Frax Lend are not the same as Aave v3, they are still a competitor), it is crucial to understand the exact benefit to the protocol of deploying on Fraxtal.
  • Regarding the competition point, does it make sense for Aave to empower and drive liquidity towards a competitive protocol at this point in time? Frax’s products will likely receive greater incentives / support on Fraxtal, and are Aave’s resources best used to drive usage for Fraxtal at this point?
  • Apart from the incentives and points, what is the potential revenue Aave DAO could get from Fraxtal in the short and long term? Why would users be incentivised to use Aave on Fraxtal compared to Frax Lend? Is there a cost/benefit analysis on this?
5 Likes
6

Hello,

  1. It makes little sense for Aave to deploy directly on a chain of a competitor why would frax support aave on Fraxtal while they have Fraxlend? Would Compound deploy on an Aave chain?

  2. there’s simply zero real commitments in terms of POL, where the numbers?

  3. There’s no Chainlink oracles oracles available on this network, I’m not aware of the Graph or the rest of the infrastructure needed to host Aave and maintain our high level of Safety and quality contributing to our Brand.

Our DAO spends millions per year to hire the service of our technical & risk service providers, The ACI is respectful of their time and will not subject them to a lengthy, complex and costly risk & technical network evaluation when the business prospect for the DAO are unproven.

This DAO has been too lenient in the past in some assets onboarding and some network deployments, in the current market conditions, laser-focus & dedication where & when it matters the most will be rewarded.

Therefore we’re cast a NAY vote to this TEMP CHECK.

2 Likes
8

Hey Marc,
Just want to know - how would the ACI decide on supporting deployment on new chains? Is it just a POL commitment to incentivise said deployment?

Re Fraxlend is a product in a number of products of Frax, and while similar, has differences that users can appreciate. However, I do agree it does not make sense to pay vendors for risk scoping etc for an ecosystem that is not developed, but would appreciate your insights to where the balance is between new deployment and spending for risk scoping.

2 Likes
9

Would Frax/Fraxtal somehow support Aave with incentives through LM or something else like other chains did?

2 Likes
10

We have decided to delete this snapshot because we have received many questions from the community and we need time to answer all questions.

2 Likes
11

Mid-march is soon. I say we revisit this then when the key infrastructure is in place.
I’m looking forward to seeing how the chain grows until that time.

12

What makes a chain worth deploying to? Aside from the general things that @bgdlabs diligences (oracle, explorer, and so on). Is it a certain amount of TVL? a certain amount of trading volume? A certain amount of liquidity? If there is concrete criteria for this, it would be great to have this in a visible place and then a lot of these temp checks would be a lot less uncertain.

1 Like
13

Fraxtal is a modular rollup blockchain (L2) with a “fractal scaling” roadmap.

*Fraxtal is not Fraxchain
スクリーンショット 2024-03-15 19.03.32

Several competing dapps with Frax Finance’s dapps, such as Curve, QiDAO, Wombat Exchange, have already announced their participation in the Fraxtal Ecosystem. *Curve V2 is already live.

Why? It’s because there are discernible differences that users can appreciate between these dapps, and these all dapps have the opportunity to generate new revenue through the fair incentive mechanism “Flox” and synergies with dapps on Fraxtal.

Additionally, the Frax Finance is positive about generate a Positive Sum with Aave. In fact, the Frax Community has been provide utility to Aave user by adding the Aave Pool to the FXS Gauge after the launch of Fraxlend. *coming soon FIP 319 Add Aave V3 aFRAX on Arbitrum to the FXS Gauge Controller

2 Likes
14

The Fraxtal point / incentive system, called “Flox”, is an automated system that rewards to both EOA and smart contract developers with FXTL Point. FXTL points will be tokenized no later than 12 months after Fraxtal chain genesis.

Flox Algorithm is open source to ensure accuracy and transparency. This algorithm calculate FXTL point based on participant’s activity and contribution to the network’s vibrancy. In other words, it is designed to maximize rewards of protocol that are utilized by many users such as Aave V3.

In the Aave case, rewards are distribute to both the Aave Users(EOA) and Aave DAO(smart contractd developer) for the following actions:

  • Supply / Borrow on Aave V3 Pool
  • Swap aToken and other token on DEX…etc

Docs about Fraxtal point / incentive: https://docs.frax.com/fraxtal/fraxtal-incentives/fraxtal-point-system

2 Likes
15

Are there any updates on the readiness of required or heavily used infrastructure on this chain including The Graph / Chainlink?

1 Like
16

What makes a chain worth deploying to? Aside from the general things that @bgdlabs diligences (oracle, explorer, and so on). Is it a certain amount of TVL? a certain amount of trading volume? A certain amount of liquidity? If there is concrete criteria for this, it would be great to have this in a visible place and then a lot of these temp checks would be a lot less uncertain.

@ACI @MarcZeller if you could provide some information on this, that would be helpful for clarity. Both to prospective chains bidding for Aave deployments and the Aave community.