The Aave community is evaluating a proposal to withdraw the lending protocol from Polygon’s Proof-of-Stake (PoS) chain.
In the Dec. 16 proposal, Marc Zeller, founder of Aave Chan, highlighted potential risks tied to Polygon’s plans to rehypothecate its stablecoin reserves while suggesting Aave should adjust risk parameters for its V2 and V3 deployments on the Ethereum layer-2 blockchain and eventually exit the network entirely.
Zeller argued that this move would protect Aave from vulnerabilities associated with bridged stablecoins and reduce long-term security threats.
Aave is Polygon’s largest decentralized application (dApp), accounting for $468 million—around 40% of the Ethereum layer-2 network’s $1.3 billion total value locked (TVL). However, the proposed withdrawal would only impact 2% of Aave’s overall TVL and 1.5% of its fee revenue.
Why AAVE is considering Polygon withdrawal
This move follows a controversial yield generation proposal on the Polygon network that ha
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