Aave backs the proposed Metis deployment
Reportedly, the community of Aave has come out supporting the deployment of V3 on Metis. Aave is a DeFi lending protocol that recently registered a TVL of $8.5 billion, and Metis is a layer 2 network on Ethereum. Reports further claim that Metis will roll out $3 million in liquidity mining for Aave users. This includes 100,000 METIS tokens through a reward program.
The development received support unanimously at the time of drafting this article. Voting for the same concludes this Thursday. No matter the outcome, polls till now have reaffirmed the commitment of Aave to support the layer 2 ecosystem of Ethereum.
Aave has already deployed V3 on the Ethereum mainnet to mitigate user risk in January. V3 is already live on seven chains, including Polygon sidechain, Optimism, and Arbitrum. L2beat has reported the TVL of Metis to be approximately $127 million, making it the fifth-largest layer 2 networks.
Offering 100,000 MEITS tokens is a part of offering liquidity incentives. Aave users will be able to claim the reward over a period of six months. Additionally, they can claim rewards via the Builder Mining Reward Program of Metis. This will depend on how much monthly transactional count has been registered by the protocol.
Four thousand MEITS will be offered monthly, provided they achieve a certain percentage of monthly transactions. The allotment of the reward will be as follows: 400 METIS every month for generating 10% of the monthly transaction count.
Metis backing V3 is a huge move considering it suffered a massive downfall recently. Its TVL peaked at $700 million in March last year; however, Starstream later suffered an exploit for $15 million. The malicious player could steal the funds and further utilize them as collateral on Agora. This enabled the hacker to borrow more funds and increase the price of STARS.
Agora also suffered by recording a bad debt of $6 million following the hack attack.
Metis DAO has now announced the plan to adopt a hybrid rollup. It basically looks to combine the power of Optimistic Rollups and zk-Rollups. The plan was unveiled on March 03, 2023, by MetisDAO Foundation.
Optimistic Rollups offer faster and more economical transactions as compared to the mainnet.
Zk-Rollups, on the other hand, come loaded with better security and performance; however, it compromises the aspect of compatibility with EVM. In other words, developers face issues while porting their code from mainnet to L2 without introducing significant changes.
Aave is a leading decentralized finance protocol with a total volume locked of $8.5 billion. Its community supporting the recent iteration – V3 – takes the L2 ecosystem of Ethereum a step forward. Live on seven chains, V3 will still be making huge progress with Metis, a layer-2 network that is ready to offer its native token as liquidity mining incentives.