Aave Community Backs Lido Alliance, Greenlighting stETH-Focused V3 Deployment
The post Aave Community Backs Lido Alliance, Greenlighting stETH-Focused V3 Deployment appeared on BitcoinEthereumNews.com.
Aave’s community passed a proposal to launch a Lido-focused deployment of v3 designed to facilitate recursive stETH borrowing. Aave, the largest web3 lending protocol, is throwing its weight behind the recently-formed Lido Alliance — an initiative to promote the adoption of the stETH liquid staking token (LST). On June 20, the Aave community passed an initial temperature check proposal to launch an instance of Aave v3 “focused on the Lido ecosystem.” “Aave and Lido have historically seen symbiotic growth, with stETH being one of the premier collaterals on Aave and leveraged staking being one of the most profitable use cases for both Aave DAO and Lido users,” the proposal said. “Lido has committed incentive programs and ecosystem support for this instance in order to bootstrap liquidity and promote additional programs within the Lido Alliance.” The proposal advocates for launching a version of the Aave v3 protocol “designed and tuned to support stETH leverage loopers.” The deployment will exclusively support wETH and Lido’s wstETH assets, with wETH’s borrowing cap at 90% of supplied wETH to ensure that stETH/wETH loops are “consistently profitable and can’t go into negative territory.” Aave is the third-largest DeFi protocol with a $12.3 billion TVL, according to DeFi Llama. StETH is the largest LST, accounting for 28.8% of staked Ether for a TVL of $33.6 billion, according to Dune Analytics. The price of AAVE is down 2.3% in the past 24 hours, according to The Defiant price feeds. Lido’s LDO token is up 3.2% over the same period. Lido Alliance Lido first unveiled plans for its Lido Alliance in mid-May. The alliance seeks to promote the development of infrastructure built around Lido’s stETH, with a focus on restaking use cases. The Alliance was created in response to the rising dominance of EigenLayer, the pioneering Ethereum restaking protocol,…
Filed under: News - @ June 21, 2024 1:16 pm