# \[TEMP CHECK\] Aave V3 Deployment on zkSync Era Mainnet

**URL:** <https://governance.aave.com/t/temp-check-aave-v3-deployment-on-zksync-era-mainnet/12477>\
**Category:** Governance\
**Created:** [March 26, 2023, 12:12pm UTC](https://governance.aave.com/t/temp-check-aave-v3-deployment-on-zksync-era-mainnet/12477 "2023-03-26T12:12:47Z")\
**Posts on this page:** 1\
**Showing post:** 11

<div class="post-metadata">

**Author:** ![Pauljlei](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/pauljlei/32/3488_2.png) [@Pauljlei](https://governance.aave.com/u/Pauljlei)\
**Post date:** [May 1, 2023, 4:23pm UTC](https://governance.aave.com/t/temp-check-aave-v3-deployment-on-zksync-era-mainnet/12477/11 "2023-05-01T16:23:44Z")

</div>

# Gauntlet Risk Recommendations

## Simple Summary

zkSync Era is a Layer-2 scaling solution for Ethereum using Zero-Knowledge tech to dramatically scale Ethereum, allowing cheaper transactions and storage. Its full alpha launch was on March 24th, and its TVL has increased to $261M in the month since then. Should market conditions change meaningfully, it would be prudent to revisit these figures.

From a market risk perspective, we recommend launching Aave on zkSync Era with conservative supply and borrow caps in line with its current TVL and liquidity.

## Recommended initial parameters

| Risk Parameter | WETH | USDC |
| --- | --- | --- |
| Isolation Mode | NO | NO |
| Enable Borrow | NO | YES |
| Borrowable in Isolation | NO | YES (for future isolated assets) |
| Enable Collateral | YES | YES |
| Loan To Value | 80% | 80% |
| Liquidation Threshold | 82.5% | 85% |
| Liquidation Bonus | 5% | 5% |
| Reserve Factor | 15% | 10% |
| Liquidation Protocol Fee | 10% | 10% |
| Borrow Cap | N/A | 10,000,000 |
| Supply Cap | 5,700 | 10,000,000 |
| Debt Ceiling | N/A | N/A |
| Base | 1% | 0% |
| Slope1 | 3.8% | 4% |
| Uoptimal | 80% | 90% |
| Slope2 | 80% | 60% |

For supply and borrow caps, we follow Gauntlet’s [supply and borrow cap methodology](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487). For all other parameters, we match the values on Optimism, as it has the most conservative parameters of the other L2s.

## Liquidity comparison with other L2s

The following table shows the 25% depth in tokens on each chain, using 1inch to swap to the other token.

| Asset | zkSync Era | Optimism | Arbitrum | Polygon |
| --- | --- | --- | --- | --- |
| WETH | 5,700 | 18,500 | 44,000 | 15,500 |
| USDC | 10,000,000 | 30,000,000 | 45,000,000 | 25,000,000 |

## zkSync Era Chain Summary Statistics

The below graphs demonstrate the shape of growth on zkSync Era:

#### TVL: [~$261M](https://l2beat.com/scaling/projects/zksync-era)

![](https://i.imgur.com/vc06FQS.png)

#### Transactions: [10.7M](https://explorer.zksync.io/)

![](https://i.imgur.com/i0S2z9t.png)

#### Users: [463K](https://dune.com/unionepro/zksync-era-stats)

![](https://i.imgur.com/HUgROZ0.png)

### zkSync Era Ecosystem dApps

If Aave v3 is deployed on zkEVM, it can interact with other DeFi protocols for lending, borrowing, and liquidity provision. According to [DefiLlama](https://defillama.com/chain/zkSync%20Era), most of the TVL on zkSync is concentrated in DEX, with $46.8M in the largest DEX, SyncSwap.

The largest lending protocol on zkSync Era is ReactorFusion, a Compound fork with $7M TVL.

## Asset Overview

Following is a breakdown of the top 3 assets on zkSync Era:

| Symbol | Address | TVL | # Txns |
| --- | --- | --- | --- |
| ETH | [0x0000000000000000000000000000000000000000](https://etherscan.io/address/0x32400084C286CF3E17e7B677ea9583e60a000324) | $152M | 588,547 |
| USDC | [0x3355df6D4c9C3035724Fd0e3914dE96A5a83aaf4](https://explorer.zksync.io/address/0x3355df6D4c9C3035724Fd0e3914dE96A5a83aaf4) | $100M | 1,489,160 |
| MUTE | [0x0e97C7a0F8B2C9885C8ac9fC6136e829CbC21d42](https://explorer.zksync.io/address/0x0e97C7a0F8B2C9885C8ac9fC6136e829CbC21d42) | $9M | 66,576 |

There are several smaller assets with much lower TVL. Notably, many large tokens (including USDT and WBTC) have not yet been bridged to zkSync Era.

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_[View the full topic](https://governance.aave.com/t/temp-check-aave-v3-deployment-on-zksync-era-mainnet/12477)._