Aave proposal to launch centralized lending on Kraken’s Ink moves to next phase

A proposal for the decentralized finance (DeFi) lending protocol $Aave to launch a centralized version of its service on the crypto exchange Kraken’s Ink blockchain has received widespread approval among the community. An $Aave request for comment (ARFC) for the deployment of a whitelabel version of $Aave v3 for the Ink Foundation, the organization behind the Ink blockchain, was approved with 99.8% of the votes cast in favor. An ARFC acts as a preliminary offchain vote before proceeding with a full decentralized autonomous organization (DAO) vote. The next phase involves drafting an $Aave improvement proposal (AIP) that will be voted onchain. The ARFC states that “by granting a license to deploy a centralized version of the $Aave ($AAVE) codebase, $Aave can expand its technology adoption while creating new revenue streams.” $Aave had not responded to a request for comment by publication time. Kraken unveiled its Ink blockchain in late 2024 , following an October announcement. The chain aims to serve as a compliant layer-2 platform for tokenized assets and institutional DeFi. Related: TradFi could move onchain due to ‘horrible banking experiences’ The proposal states that the partnership could be “an opportunity for $Aave to expand its influence in the institutional lending space,” creating additional revenue streams for the protocol. The $Aave DAO would receive a share “greater than or equal to the equivalent of a Reserve Factor of 5% based on borrow volume in all pools.” The Ink Foundation also committed funds to the development of the new protocol: “The Ink Foundation has committed significant incentives to bootstrapping this instance. This includes multiple liquidity mining programs that are expected to bring over $250M in early supply to the instance.” Related: No more ETH dumps? Ethereum Foundation turns to DeFi for cash The announcement follows $Aave reaching a total value locked (TVL) of $40.3 billion in mid-May. However, data from DefiLlama shows $Aave’s current TVL has dipped to about $33.5 billion, placing it second behind liquid staking platform Lido, which holds $34.3 billion in assets. Magazine: TradFi is building Ethereum L2s to tokenize trillions in RWAs: Inside story