Aave contributors suggest Aave quits Polygon PoS chain over Polygon's 'high-risk' bridging proposal

PANews reported on December 16 that according to The Block, the Aave community received a proposal from the contributor team Aave Chan to withdraw its lending services from Polygon’s Proof of Stake (PoS) chain. This action comes in response to another proposal from the Polygon community that plans to leverage over $1 billion in bridge assets for revenue generation. Aave is the largest decentralized application on Polygon by total value locked, with over $466 million in deposits on the PoS chain.

The proposal, written by Aave Chan founder Marc Zeller, aims to phase out Aave’s lending protocol to prevent possible future security risks. He requested that the risk parameters of versions 2 and 3 of the Aave protocol on the Polygon PoS chain be adjusted to reduce the potential threats posed by the use of bridge stablecoins, and proposed that if Polygon’s proposal is passed, corresponding measures should be taken to obtain rewards. His proposal suggests strict measures to offset Aave’s potential risks in Polygon’s PoS on-chain lending market. These include setting a 0% loan-to-value ratio (LTV) for all assets and increasing the reserve factor to 85%, effectively blocking further deposits or preventing users from borrowing against their collateral. "These adjustments are in response to an upcoming proposal that will have a significant impact on the risk profile of bridged assets in the Polygon network," Zeller wrote.

Previously , the Polygon community released a proposal for the "Polygon PoS Cross-Chain Liquidity Plan", proposing to use more than $1 billion in stablecoin reserves held on the PoS chain bridge to generate revenue.