The Aave decentralized liquidity protocol has been implemented on the Ethereum (ETH) layer 2 scaling platform Metis, bringing a host of decentralized finance (DeFi) features and products to its ecosystem.
The Aave community recently voted in favor of a proposal that implements the zero-knowledge (zk) proof zkSync EVM, paving the way for the DeFi protocol to take advantage of the powerful performance improvements offered by the scaling infrastructure.
Participants in the Ethereum ecosystem are developing a number of different Layer 2 protocols powered by zk-proof, providing the wider space with an infrastructure option to scale their respective platforms.
While Aave has not yet been implemented in zkSync Era, it has announced the implementation of version V3 of its protocol in the Optimistic Metis cumulative scaling protocol. The latest version of the Aave protocol is touted to benefit users on both protocols, and Metis users will benefit from DeFi’s provision of lending and lending services.
ethereum.org highlights the main difference between optimistic summaries and zk summaries. The former processes transactions off-chain before posting the data on-chain, with a time frame for network participants to question the validity of the transaction data.
Meanwhile, Zk-rollups execute transactions off-chain and send large batches on-chain using a single proof of validity, without the need for the network to validate the data.
The Metis team highlighted several ways users in their ecosystem can benefit from implementing Aave. This includes less collateralized asset lending with Aave’s high-efficiency mode, better risk management with bid and lend limits, as well as siled lending to reduce exposure to potential market contagion.
Aave’s isolation mode also increases the pool of collateral assets, its cross-chain portals provide access to broader DeFi solutions, and its gas optimization also reduces transaction fees.
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Aave is renowned in the DeFi space, with over $5.5 billion in total value locked in the protocol. V3 of the DeFi liquidity protocol was deployed on the Ethereum mainnet in January 2023, following its release on a number of Ethereum layer 2 protocols, including Avalanche, Arbitrum, Optimism, and Polygon.
Another prominent DeFi player, 1inch Network, also opted for zkSync to implement its aggregation and order-limit protocols, while Uniswap token holders voted to implement Polygon’s zkEVM cumulative solution in April 2023.
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