Key Takeaways
- Aave, a decentralized lending and borrowing protocol, has announced it will build a new DeFi service on Polygon.
- As an Ethereum sidechain, Polygon will help to reduce the exorbitant gas fees that Aave currently pays.
- The team will soon build a smart contract bridge that will allow Aave users to port their assets to Polygon using Metamask.
Decentralized lending platform Aave says that it will scale its DeFi platform beyond the Ethereum blockchain by putting its platform on a number of sidechains, including Polygon.
Aave Explores Polygon
According to Aave, Ethereum’s exorbitant gas fees are a problem. Though it acknowledges high fees are a feature of “a successful public blockchain” because they indicate users are willing to pay the price of its services, alternative solutions are needed.
In light of that issue, the team will port its platform to Polygon, a layer 2 proof-of-stake sidechain that runs alongside Ethereum’s main network. The sidechain allows users to send back and forth tokens through a bridge protocol, thereby offering lower transaction costs than Ethereum itself provides.
Aave says that once its platform is available on Polygon, it will add its native asset (MATIC) to the list of collateral. At launch, the assets that will be used as collateral on Polygon-based Aave markets include MATIC, USDC, USDT, DAI, WETH, AAVE, and WBTC.
The team will also build a smart contract bridge that will allow Aave users to port their assets to Polygon using Metamask.
Polygon Is a Top Choice for NFTs
Aave is the third largest DeFi platform in operation, boasting over $5 billion in over total value locked, making it the most significant DeFi platform to become available on Polygon.
Polygon has additionally onboarded several other projects. It has attracted the NFT game Aavegotchi, the prediction market Polymarket, the betting platforms Decentral Games and SportX, the DeFi platform EasyFi, and the blockchain RPG game Neon District.
Polygon is the 27th largest DeFi protocol, with a total locked value of $175 million. It was previously known as Matic Network.
Disclaimer: At the time of writing this author held Cosmos (ATOM).
