On Tuesday, Marc Zeller, integration lead at decentralized finance (DeFi) borrowing and lending protocol Aave, proposed to freeze the platform’s v3 Fantom market. Created in 2018, Fantom is a directed acrylic graph sensible contract platform that gives DeFi companies and on which Aave is at present bridged.
Zeller defined the rationale for eradicating the Fantom bridge:
“After the Harmony bridge event and the recent Nomad bridge exploit, the Aave community should consider the risk/benefits of keeping an active Aave V3 market on Fantom as this network is dependent on any swap (multichain) bridge.”
Zeller additional defined that the Aave v3 Fantom market didn’t achieve noticeable traction, with a present market measurement of $9 million and $2.4 million of open borrowing. In comparability, the Aave protocol has a complete worth locked of $3.48 billion. Meanwhile, the Fantom market on Aave solely generates roughly $300 per day for the borrowing-lending protocol, of which $30 goes to the Aave Treasury.
If handed, the Aave Improvement Protocol would enable customers to repay their money owed and withdraw however block additional deposits and borrowings on this market. After 5 days, a neighborhood vote might be held to find out the longer term of Aave v3 Fantom. The Aave crew wrote:
“The risk of exposing users to potentially losing millions of $ due to causes exterior to intrinsic Aave security is considered not worth the $30 of daily fees accrued by the Aave treasury.”
Related: Backlash as Harmony proposes minting 4.97B tokens to reimburse victims
Multichain bridging, whereas praised by some as a pinnacle of interchain communications, has been criticized by skeptics comparable to Vitalik Buterin for its supposed fragility. Earlier on Tuesday, the Nomad token bridge was drained for $190 million after hackers found a single code exploit that anybody may replicate, resulting in a “decentralized robbery” as different customers joined in on the preliminary hacker’s siphoning of funds.
After publication, Simone Pomposi, Fantom’s chief advertising and marketing officer reached out to Cointelegraph, claiming:
“The Aave governance proposal has been framed as to prevent a potential bridging problem; however, the actual reason behind the proposal seems to be that Aave is not capturing enough market share on the Fantom network to justify the risk. Proposing to remove access to a decentralized app because the business model is faulty/unprofitable makes sense, but blaming it on hypotheticals [related to cross-chain bridges] isn’t fair.”