Aave is putting forward a proposal for community voting regarding the implementation of its new ARFC aimed at establishing a ‘Lido Aave V3 Instance’.

Stani Kulechov, recognized as the visionary behind the decentralized finance (DeFi) lending protocol, has made waves by announcing on social media the upcoming form of a dedicated Aave market that will cater to liquid staking. Aave In the recent announcement, it was highlighted that Aave has initiated a Formal Request for Comments to collect feedback on launching a 'Lido Aave V3 instance', suggesting a collaborative effort between Aave DAO and the Lido Alliance to tailor this instance specifically for Lido's structure. Lido .

Lido is actively working to form the Lido Alliance, which aims to stimulate innovative uses for staked ETH while broadening its ecosystem. The proposal advises Aave to support the Lido Alliance’s initiatives through the introduction of a specialized Aave V3 ETH market designed for Lido, configured to support stETH leverage loopers and exclusively using wstETH and wETH with E-Mode enabled.

The Aave V3 instance under Lido's framework involves establishing the borrowing cap for wETH at 90% of what has been supplied, with the E-Mode loan-to-value and liquidity token adjusted to be 50 basis points higher than other versions, effectively turning it into an optimized looping platform. During the first half-year of the Lido Alliance's Aave V3 launch, it is planned to keep the wETH slope1 fixed at 2.50%, while the wETH risk factor is pegged at 10%, alongside a 5% risk factor for wstETH.

This platform acts as a liquid staking service that supports both Ethereum and Polygon networks, providing derivative token contracts aimed at liquid staking and adding necessary smart contract infrastructure for native token staking solutions.

Lido A new specialized Aave market for Lido is set to launch, with Aave V3 being versatile enough to cater to a variety of risk configurations according to unique user preferences. This could pave the way for the emergence of more custom markets in the future.

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Alisa, a passionate journalist at Cryptocurrencylistings, focuses on various aspects of cryptocurrency, zero-knowledge proofs, investments, and the expansive landscape of Web3. With an acute awareness of emerging trends and technological advancements, she offers in-depth analyses that aim to inform and engage readers amid the ever-changing world of digital finance.

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