Aave’s Proposal To Add wstETH To Aave V3 On BNB Chain Opens For Voting
In Brief
Aave introduced a proposal to add wstETH to Aave V3 on BNB Chain, aiming to expand token’s accessibility across blockchains and increase options for BNB Chain users.
Community behind the decentralized finance (DeFi) lending protocol, Aave introduced a proposal to add wrapped staked ETH (wstETH) to Aave V3 on the BNB Chain. This addition aims to expand Aave’s accessibility across alternative blockchains and increase options for users on the BNB Chain. The voting is set to conclude on November 4th.
wstETH is an ERC-20 token that serves as a value-accruing wrapper for staked ETH (stETH). While the balance of wstETH remains static with each oracle update, its value in relation to stETH fluctuates. Essentially, wstETH signifies a user’s share of the total stETH supply.
The primary purpose of wstETH is to facilitate compatibility, allowing stETH to be utilized within various DeFi protocols that do not accommodate rebasable tokens. This is particularly important for bridges connecting to Layer 2 solutions and other blockchain networks, as rebasing does not typically apply to assets being bridged.
The token is widely used as collateral and borrowing token on Aave, has over $4 billion in deposits and $100 million in borrows across its deployments. Adding wstETH to Aave V3 on the BNB Chain will offer users more opportunities to earn staking rewards on their collateral and could boost Aave’s presence on the BNB Chain.
According to the decentralized voting platform Snapshot, the proposal has already received strong support, with over 767,000 AAVE tokens voting in favor, reflecting unanimous approval. A discussion on the governance forum is ongoing to finalize risk parameters, and a final AIP vote is anticipated soon to confirm and implement the proposal.
What Is Aave V3?
The Aave Protocol is a decentralized, non-custodial liquidity platform that enables users to engage as suppliers, borrowers, or liquidators. Central to the protocol is the AAVE token, which functions as a governance asset, empowering holders to influence the direction of the protocol while also offering financial rewards.
Aave V3 introduces improvements such as enhanced capital efficiency, increased security measures, and cross-chain functionality, all aimed at strengthening decentralization within the protocol. Key features include an isolation mode that enables Aave Governance to list new assets as isolated assets with designated debt ceilings, as well as an efficiency mode (E-mode) that optimizes capital usage when the collateral and borrowed assets are closely correlated in price.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
