StarkWare’s Proposal: Deploying Aave on StarkNet’s ZK-Rollup L2

**Aave Proposal: Deploying on StarkNet**

A new proposal has been submitted to Aave’s governance forum, advocating for the deployment of the DeFi lending protocol on StarkNet. This proposal, submitted by Yael Doweck, product manager at StarkWare, aims to onboard Aave onto StarkNet, which is StarkWare’s permissionless and decentralized ZK-Rollup.

**Bringing Value to Aave**

The proposal highlights the potential benefits of deploying on StarkNet, noting that the success of the Polygon and Avalanche markets indicates the additional value that can be gained from such a move. While Polygon serves as a sidechain with its own security model, StarkNet offers an L2 solution that brings Validity rollups, providing added security on top of L1’s. This attractive security feature aims to entice applications and users who may be hesitant to join sidechains.

**Capital Efficiency and Interconnectivity**

One of the advantages of StarkNet highlighted in the proposal is its capital efficiency, particularly in terms of a shorter withdrawal period. This efficiency will enable the deployment to establish efficient liquidity connections between networks. Currently, 14 DeFi and gaming applications have been built on StarkNet, and it has entered into a partnership with the leading centralized exchange OKEx.

**Co-Funding Effort**

The proposal suggests that StarkWare, as the core StarkNet protocol developer, and the DAO should co-fund this deployment effort on a 50/50 basis. This collaborative funding approach demonstrates the shared commitment to the success of the deployment.

**Aave: A Leading DeFi Protocol**

Aave, known as one of the leading decentralized finance protocols, has attracted significant attention within the crypto space. With $14.15 billion of assets locked in the protocol, Aave is currently the fourth-largest DeFi project. However, this figure has dropped from a high of $19.13 billion in late October. Aave’s governance token, AAVE, is currently trading at around $248, representing a decline of 62.5% from its all-time high in May.

**Partnership with Centrifuge: Enabling Access to Liquidity**

Aave has also formed a partnership with decentralized financing protocol Centrifuge, aiming to provide small and medium-sized enterprises (SMEs) with access to liquidity in the crypto market through the tokenization of real-world assets. By tokenizing bridge loans, freight invoices, trade receivables, and other assets, Aave will leverage these tokens as collateral.

**Bridging the Gap between TradFi and DeFi**

Centrifuge developer End Labs’ Co-founder, Lucas Vogelsang, highlights the significance of the partnership, stating that it allows Aave depositors to earn yield against stable, uncorrelated real-world collateral. This initiative aims to bridge the regulated world of traditional finance (TradFi) with the trustless world of decentralized finance (DeFi). In addition, Centrifuge issuers will have the ability to stake collateral and borrow from the market across various asset classes.

With this proposed deployment on StarkNet and the partnership with Centrifuge, Aave aims to expand its capabilities and provide more opportunities for its users. These initiatives demonstrate Aave’s commitment to driving innovation and offering efficient and secure DeFi solutions. Through the collaboration with StarkWare and Centrifuge, Aave is poised to make significant strides in the crypto market.

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