Aave Considers Expansion to Sonic with $63M Liquidity Commitment

Aave, a leading DeFi protocol, is on the verge of expanding to Sonic, an EVM-compatible blockchain network developed by the creators of Fantom.

A new governance proposal, submitted on January 31 by the Aave Chan Initiative (ACI), seeks approval for deploying Aave V3 on Sonic, highlighting the network’s high-speed transactions and fee-sharing model as key incentives.

The proposal, currently in the Aave Request for Comment (ARFC) stage, includes a substantial $63 million liquidity commitment. This funding package comprises a $15 million pledge from the Sonic Foundation, $20 million in USDC (Circle’s stablecoin), and up to 50 million $S tokens, valued at approximately $27.15 million. Additionally, Aave itself would contribute $800,000 in stablecoins to support the initiative.

Aave has historically deployed its protocol across multiple promising Layer 1 and Layer 2 EVM-compatible networks, often becoming one of the largest projects on those ecosystems. The proposal acknowledges Sonic’s potential, citing the track record of its development team and its innovative blockchain infrastructure as strong reasons for expansion.

The governance process has now entered its next phase, with an ARFC vote underway. In December, the Aave community approved an initial “temp check” vote in favor of exploring Sonic integration. If this current proposal passes, it will trigger a detailed risk assessment before a final governance vote determines the ultimate decision. Voting on the proposal remains open until February 4.

Meanwhile, Aave had also been working on Aave V4, a major upgrade featuring an entirely new architecture. This version was set to introduce a Unified Liquidity Layer, aimed at improving the integration of key elements such as isolation pools, risk modules, and Aave’s native stablecoin, GHO, which launched in July 2023.

A standout feature of Aave V4 was the implementation of dynamic interest rates, which could adjust in real-time based on market conditions. This mechanism would be powered by Chainlink oracles, enabling more responsive and efficient lending and borrowing within the ecosystem.

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