Aave will be expanding to Coinbase L2, Base through the activation of the Aave V3 Base pool (3.0.2). The move comes as a result of meticulous planning and consultation with risk service providers Gauntlet and Chaos Labs.
Aave is a decentralized finance (DeFi) protocol that operates on the Ethereum blockchain. It facilitates lending and borrowing cryptocurrency assets through smart contracts, allowing users to earn interest on deposited assets and borrow assets using their deposits as collateral.
The Aave protocol is known for its unique features, including the concept of “flash loans,” which enable users to borrow assets without requiring any collateral, as long as the borrowed funds are returned within the same transaction. This feature has enabled various innovative use cases within the DeFi ecosystem.
According to Aave, the proposal involves adding assets including Wrapped Ether (WETH), Compound Wrapped Ether (cbETH), and USD Coin (USDbC) to the Aave V3 pool. These measures are aimed at tapping into new user bases and exploring innovative use cases within the growing Base and Coinbase ecosystem.
Furthermore, it is noted that the Aave community has shown overwhelming support for this expansion strategy, with endorsements pouring in through the governance forum and snapshot. The decision aligns with Aave’s continuous effort to maintain its status as a pioneer in the DeFi space.
One of the critical steps in the proposal involves designating a risk steward as the risk administrator, achieved by executing the ACL_MANAGER.addRiskAdmin() function. Additionally, the proposal involves setting up a price oracle sentinel via the POOL_ADDRESSES_PROVIDER.setPriceOracleSentinel() function. These measures will play a vital role in safeguarding the security and stability of the platform.
In addition, there will be a listing of three prominent assets on the Aave V3 Base pool: Wrapped Ether (wETH), Compound Wrapped Ether (cbETH), and USD Coin (USDbC).
Aave said that this is being considered after the assets were evaluated, with their initial risk parameters.
