Decentralized liquidity protocol Aave has announced the deployment of its v3 protocol on Optimistic Rollup scaling protocol Metis, marking its latest expansion onto the Ethereum layer-2 network. The move enables Metis users to access a range of decentralized finance (DeFi) features and products, including borrowing and lending services.
A new era of Decentralized Finance is here.@AaveAave’s V3 lending markets are officially live in Metis👻
Try it out now⚡️ pic.twitter.com/bS4F8thPhp
— Metis 🌿 (@MetisDAO) May 8, 2023
While Aave’s community recently voted to deploy on the zero-knowledge Ethereum Virtual Machine (zkEVM) platform zkSync Era, the DeFi protocol has yet to make a move. Aave is not using its own scaling protocol. Instead, it uses Metis’ Optimistic Rollup scaling protocol to process transactions off-chain. The processed data is then published on-chain with a time limit for network users to contest the transaction data’s authenticity.
— Aave (@AaveAave) April 14, 2023
Metis users take advantage of Aave’s latest protocol, which offers borrowing with high efficiency, requiring less collateral. In addition, it provides improved risk management and siloed borrowing to minimize the risk of exposure to potential market contagion.
Aave’s isolation mode expands the pool of collateral assets available for use. Additionally, its cross-chain portals enable access to a wider range of DeFi solutions. Finally, its gas optimization reduces transaction costs, making it more cost-effective to use.
Aave’s deployment on Metis underscores the growing number of zk-proof-powered layer-2 protocols being developed by Ethereum ecosystem participants. Both platforms offer developers a variety of infrastructure options to scale their platforms. This includes processing transactions off-chain and submitting large batches on-chain using a single proof-of-validity, as is possible with zk-Rollups.
Aave’s Success in the DeFi Space
Aave’s deployment on Metis follows its successful expansion onto several other Ethereum layer-2 protocols, including Avalanche, Arbitrum (ARB), Optimism (OP), and Polygon. The protocol is worth over $5.5 billion, making it one of the most popular DeFi platforms.
Other prominent DeFi players, including 1inch Network and Uniswap, have also opted for different Ethereum layer-2 solutions. 1inch Network chose zkSync to deploy its aggregation and limit-order protocols, while Uniswap token holders voted to deploy Polygon’s zkEVM Rollup solution in April 2023.
As the Ethereum ecosystem evolves, more layer-2 solutions will likely emerge, providing developers and users with a greater range of options for scaling their DeFi platforms. Aave’s latest deployment on Metis is just one example of how these solutions can benefit users by providing faster, more efficient, and cost-effective services.
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