Decentralized lending protocol Aave is exploring the possibility of deploying an MVP version of Aave version 3 on Polygon’s upcoming zkEVM Layer 2 network. The main aim of the proposal is to establish a strategic Aave presence on the new network early on, after the mainnet beta goes live on March 27.

To minimize risks, the proposal recommends onboarding only a limited number of assets and setting conservative risk parameters. It suggests onboarding only three collateral types, including wrapped ETH (WETH) and wrapped MATIC (WMATIC) tokens, as well as USDC stablecoin. Additionally, it proposes including only one borrowable asset, the USDC stablecoin.

Polygon’s zkEVM is a zero-knowledge or ZK-rollup that conducts off-chain computations on a secondary layer for faster and cheaper transactions while prioritizing security. The platform aims to further enhance the scalability of the Ethereum network.

Aave has a proven track record of working closely with core teams to implement its lending protocol, particularly on the Polygon and Avalanche blockchains in 2021.

The deployment of Aave’s lending protocol on Polygon’s sidechain network in 2021 led to an increase in activity on the network.

The proposal also lays the groundwork for possibly issuing Aave’s GHO stablecoin on the zkEVM in the future, subject to governance approval.

As Ethereum network’s scaling capabilities continue to evolve, Aave’s strategic presence on Polygon’s upcoming zkEVM Layer 2 network could provide a significant boost to the adoption of the lending protocol.

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