The Aave DAO just deployed a dedicated EtherFi market on Aave. Users will now be able borrow stablecoins like $USDC, $pyUSD, and $FRAX against their weETH liquid staking tokens.

Liquid restaking tokens like weETH have introduced more advanced DeFi strategies like leveraged ETH staking, made possible by Aave's flexible architecture. Currently, the demand to borrow against weETH collateral on Aave is so high that caps are filled within minutes each week on Ethereum, Arbitrum, Base, and Scroll.

This is the second dedicated instance, following Lido's last month, and Ethena's which is currently in a final comment period in Aave DAO governance. It also provides a glimpse at Aave V4, in terms of dedicated liquidity instances and the ability to isolate risk.

This dedicated EtherFi market also shows that the Aave community is considering more curated, scalable, and liquid markets, over a higher quantity of potentially risky markets for smaller assets.

Turbocharging DeFi: Introducing Sky Aave Force

An initiative by @stani and @runekek, Sky Aave Force has an ambitious goal: to drive mass adoption and close the gap between DeFi and TradFi. Now is the time to work together. 

As @stani says, DeFi protocols have matured, showing resilience and market fit. By working together, DeFi can become the backbone of all finance, enabling unprecedented access and propelling new use cases. We are no longer building on the sidelines; DeFi can empower all of finance.

<x.com/StaniKulechov/status/1828026567152280045>

Sky (@sky) Aave Force will propose:

🔁 Integrating USDS and Savings USDS (sUSDS) on Aave V3 with native token rewards.

🏪 Creating a new Spark / Aave market for seamless interactions and exclusive rewards.

…and more 👻

Sky Aave Force marks the first steps towards an aligned and more resilient ecosystem, with an important agenda in mind: wider accessibility, adoption, and collaborative advancement. 

For all the details read the Phoenix Labs and @aavechan proposals:

<governance.aave.com/t/temp-check-onboard-usds-and-susds-to-aave-v3/18806?u=phoenixlabs>

<forum.makerdao.com/t/spark-proposal-for-integrations-into-aave/25005>

Aave V3 is debuting on Era Mainnet, powered by @zksync, unlocking unprecedented scalability, privacy, and security while expanding the DeFi user base and new institutional use cases.

As part of the integration, @chainlink will provide secure and reliable price feeds. @bgdlabs deployed the integration on behalf of Aave DAO, with risk analysis completed by Chaos Labs.

Additionally, @aavechan Initiative will coordinate @gho incentives on behalf of Aave DAO by redistributing any airdrops received from the ZKsync ecosystem via liquidity incentives, safety module deployments, and Merit programs.

Read more: <avara.xyz/blog/aave-launches-on-era-mainnet-powered-by-zksync>

Or join our Spaces with @zksync to learn more about the integration's significance for the broader DeFi ecosystem: <x.com/i/spaces/1BdGYEmnaWgGX>

Secure governance processes often go unnoticed until they are needed the most. How does the Aave DAO approach governance? Let's break it down 👇

The first thing to know about Aave DAO is its phased voting. Anyone can introduce a topic in the governance forum, and the Aave community can signal initial support with a public "temp check" vote. If there's enough support, the Aave community is formally invited to provide feedback on the proposal through the Aave Final Request for Comment (ARFC) vote.

Any proposal which passes the ARFC phase and requires an onchain payload moves to the Aave Improvement Proposal ("AIP") phase. An AIP is the proposal payload which will be submitted onchain and voted on by the community.

An important feature of AIPs is a "timelock delay" (see image) where community guardians can halt a malicious payload if necessary. Most protocol updates have a 1 day timelock delay. Updating core permissions for Aave Governance initiates a 7 day timelock delay.

Beyond the governance process itself, decentralization requires consistent participation from token holders and organizations alike. Aave DAO historically has had some of the most active governance: 661 proposals, 74.2K lifetime participating addresses, and 1.7M votes.

Another key feature of Aave's governance is the Aave Guardians. These community-elected members safeguard the protocol by executing emergency measures if facing an unexpected event like a governance takeover.

<docs.aave.com/governance/master/aave-guardians>

The Governance Emergency Guardian is authorized to veto onchain proposals within a limited timeframe, safeguarding against potential governance takeovers.

Another aspect Aave DAO governance security is that voting can occur on multiple interfaces.

• Aave Labs: app.aave.com/governance

• Boardroom: boardroom.io/aave/proposals

• BGD Labs' Interface: <vote.onaave.com/>

And finally, @bgdlabs, an Aave DAO service provider, created the Seatbelt Report, which meticulously analyzes and decodes governance payloads to ensure that state changes are as intended.

<governance.aave.com/t/bgd-aave-bored-ghosts-phase-2-recap/16791#h-93-aave-seatbelthttpsgithubcombgd-labsseatbelt-gov-v3-37>

Check out the full governance process here if you're still curious: <docs.aave.com/governance/master/governance-process>

The Aave DAO encourages active discussions so feel free to drop into the governance forum (<governance.aave.com/)>>) with a question or a proposal or even ask Skyward, a free service from @aavechan, for help on your proposal.

governance.aave.com/t/introducing-skyward-a-free-service-for-aave-dao-by-aave-chan-initiative/13173

At Open Finance Day Brussels, the keynote panel with @stani, Mo Shaikh, Sergey Nazarov, moderated by Laura Shin, discussed the resiliency and maturation of DeFi and what a multi-chain future might look like.

“Banks and regulators are all trying to figure out how to participate in this space. That facilitation requires responsible approaches across the board…we’ve been rebuilding that trust collectively.” - Mo Shaikh