Aave deployed its lending markets on Sonic, a high-performance blockchain that evolved from Fantom. This is Aave’s first Layer 1 expansion this year, marking another step in its efforts to expand across blockchains.
The move to deploy Aave version 3 on Sonic followed a vote approving the governance proposal from contributor and delegate Aave Chan Initiative.
Sonic pivoted and rebranded from Fantom to Sonic, and its mainnet launched in Dec. 2024. This network, which currently has a total value locked of over $700 million, also offers fee monetization for developers. According to Aave, Sonic’s monetization model allows decentralized protocols like Aave to earn a share of the transaction fees generated by user activity. Therefore, fee monetization can potentially be an additional income source for Aave.
“Sonic’s focus on its innovative revenue-sharing model and team expertise creates a compelling opportunity for Aave to expand its reach and participate in a growing, community-oriented DeFi ecosystem,” said Stani Kulechov, founder of Aave Labs.
Aave’s expansion to Sonic is supported by liquidity commitments, including $15 million in funding from the Sonic Foundation, up to 50 million Sonic-native $S tokens, and $800,000 in stablecoins from Aave and migration incentives.
This coincides with Aave governance’s decision to cease lending operations on the Polygon PoS chain due to potential risks associated with Polygon's pre-PIP to rehypothecate stablecoins through its native bridge. Although Polygon rejected this proposal, the decision did not alter the stance of Aave contributors.
“The Aave community is highly focused on risk management. After extensive open discussion in the Aave forum, the community decided that the underlying risk elements in the original proposal necessitated halting activities,” Kulechov said in a statement to The Block.
Aave launched on Ethereum in 2018 and later expanded to include several Layer 2 solutions, such as Arbitrum, Base, Optimism, Polygon, Metis, and Scroll. It also operates on Avalanche, Gnosis Chain, and BNB Chain. Aave’s total value locked across these chains now exceeds $19 billion.
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