TechFlow news — On December 16, according to The Block, the Aave community received a proposal from contributor team Aave Chan to withdraw its lending services from Polygon's Proof-of-Stake (PoS) chain. This move responds to another proposal from the Polygon community that plans to generate yield using over $1 billion in bridged assets. Aave is the largest decentralized application on Polygon by total value locked, with more than $466 million in deposits on the PoS chain.
The proposal was authored by Aave Chan founder Marc Zeller, aiming to gradually phase out Aave's lending protocol to protect it from potential future security risks. He requested adjustments to the risk parameters of Aave Protocol V2 and V3 on the Polygon PoS chain to mitigate possible threats associated with bridged stablecoins, especially after the approval of Polygon’s proposal to generate yield.
His suggestion introduces strict measures to counter potential risks in Aave’s lending markets on the Polygon PoS chain. These include setting loan-to-value ratios at 0% for all assets and increasing reserve factors to 85%, effectively preventing users from making further deposits or borrowing against their collateral.
"These adjustments are intended to respond to an upcoming proposal that would significantly impact the risk profile of bridged assets within the Polygon network," Zeller wrote.
