Decentralized liquidity protocol Aave has deployed on Ethereum layer-2 scaling platform Metis, bringing a host of decentralized finance (DeFi) features and products to its ecosystem.
Aave’s (AAVE) community recently voted in favor of a proposal deploying on zero-knowledge Ethereum Virtual Machine (zkEVM) platform zkSync Era, paving the way for the DeFi protocol to tap into powerful performance improvements delivered by the scaling infrastructure.
A number of different zk-proof-powered layer-2 protocols are being developed by Ethereum ecosystem participants, providing developers with a choice of infrastructure to scale their respective platforms.
While Aave has yet to deploy on zkSync Era, it has announced its deployment of v3 of its protocol on Optimistic Rollup scaling protocol Metis. The latest version of Aave’s protocol is touted to benefit users across both protocols, with Metis users set to benefit from the provision of DeFi borrowing and lending services.
Ethereum.org highlights the main difference between Optimistic Rollups and zk-Rollups. The former processes transactions off-chain before publishing data on-chain, with a timeframe for network participants to challenge the validity of transaction data.
Zk-Rollups, meanwhile, execute transactions off-chain and submit large batches on-chain using a single proof-of-validity, with no need for the network to validate the data.
The team from Metis highlighted a number of ways in which users of its ecosystem can benefit from Aave’s deployment. This includes borrowing assets with less collateral with Aave’s “high efficiency” mode, improved risk management with supply and borrowing caps, and siloed borrowing 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 wider 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 Ethereum’s mainnet in January 2023 following its launch on a number of Ethereum layer-2 protocols, including Avalanche (AVAX), Arbitrum (ARB), Optimism (OP) and Polygon (MATIC).
1inch Network, another prominent DeFi player, also opted for zkSync to deploy its aggregation and limit-order protocols, while Uniswap (UNI) tokenholders voted in favor of deploying on Polygon’s zkEVM roll-up solution in April 2023.
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