Avara founder backs proposal to offboard Polygon markets from Aave

Stani Kulechov, CEO and founder of Avara, the parent entity for the suite of Aave companies, recently backed a proposal to drop support for Polygon markets from the Aave platform. 

The proposal to drop Polygon followed an early-stage Polygon improvement proposal (PIP) from Allez Labs and Morpho to use stablecoins in Polygon's proof-of-stake Portal bridge to generate yield.

According to Kulechov, the suggested Polygon improvement proposal posed an unacceptable safety risk to Aave, as bridge exploits have led to some of the most catastrophic financial losses in decentralized finance.

The Avara founder noted the effects of the $100 million Harmony Horizon bridge hack in June 2022 as just one example of the dangers posed by bridge exploits. Cointelegraph reached out to Kulechov but was unable to obtain a response before publication.

Kulechov's post echoed a Dec. 13 proposal from Aave chain founder Marc Zeller to discourage Polygon users from using Aave and eventually end support altogether.

Zeller suggested adjusting the risk parameters of loans on Aave v2 and Aave v3 on the Polygon network to make it unattractive for Polygon users to deposit funds into the lending protocol.

Stani Kulechov’s post backing the severing of ties between Aave and Polygon. Source: Aave governance forum

Related: Allez Labs proposes yield opportunity for Polygon PoS bridge funds

The other side of the story

Polygon founder Sandeep Nailwal responded to Aave’s leadership on social media by characterizing the proposal to sever ties as "monopolistic."

According to Nailwal, Aave's leadership submitted a similar Pre-PIP to use stablecoins in the Polygon proof-of-stake bridge to generate yield. Aave was initially very excited about providing yield-bearing opportunities for the $1.3 billion in stablecoins held in the Polygon bridge.

The original Pre-PIP from Allez and Morpho. Source: Polygon

Nailwal argued that the Morpho proposal, which was still generally rejected by the Polygon community, was more decentralized and featured incentives that would encourage project development in the Polygon ecosystem.

These attractive selling points caused the proposal from Morpho and Allez Labs to gain traction and generate more buzz among the Polygon community than the competing proposal from the Aave leadership, Nailwal said.

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