Aave DAO Approves White-Label Version, then What Next?

In a significant move for the decentralized finance (DeFi) world, Aave DAO has approved the launch of a white-label version of its lending protocol by the Kraken-backed Ink Foundation.

With overwhelming support in the AFRC vote (99.8% in favor), the partnership marks a new chapter in Aave’s journey, expanding its reach into the institutional lending space. This collaboration is poised to leverage Aave’s battle-tested infrastructure to offer a customized, centralized version of its Aave V3 platform.

In this article, we’ll delve into the details of this decision, its potential impact on the DeFi ecosystem, and what it means for both Aave DAO and the Ink Foundation moving forward.

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What is the Aave DAO’s Decision?

Aave’s governance system, the Aave DAO, has voted to grant the Ink Foundation the opportunity to launch a white-label version of Aave V3. This means that the Ink Foundation will be able to rebrand and operate Aave’s lending protocol, using the underlying Aave V3 codebase to create its platform.

The goal is to use Aave’s well-established framework to build a native lending platform that operates within the Ethereum Layer 2 ecosystem, which is supported by Kraken.

The Ink Foundation’s approach will aim to bring Aave’s decentralized lending infrastructure to a wider, possibly more institutional audience.

The decision is viewed as a step toward strengthening Aave’s foothold in the institutional lending market, without compromising its technological excellence.

The Role of the Ink Foundation

The Ink Foundation, a non-profit supported by Kraken, is focused on creating a centralized version of Aave’s lending protocol to cater to institutional users. The idea is to create a more tailored lending experience, leveraging Aave’s Aave V3 protocol as a foundation.

With the backing of Kraken, a major player in the crypto space, the Ink Foundation has the potential to scale quickly and attract significant liquidity.

The Ink Foundation will dedicate significant resources to ensure the success of this white-label instance, including the introduction of liquidity mining programs. These initiatives aim to attract over $250 million in initial liquidity, providing strong incentives for users to participate in the new platform.

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What’s Next for Aave DAO?

As part of the deal, Aave DAO service providers will assist the Ink Foundation in running the Aave V3 instance for the first six months. This partnership will allow Aave DAO to ensure smooth operation during the initial launch phase.

In exchange, Aave DAO will receive a share of the new platform’s revenue. This revenue share is expected to be equal to or greater than a Reserve Factor of 5% based on the borrow volume across all liquidity pools.

The Aave DAO has also secured a commitment from the Ink Foundation. For at least 12 months, the Ink Foundation and its centralized partners will not collaborate with other lending protocols, ensuring a dedicated focus on expanding the new Aave-powered platform.

The Expansive Reach of Aave V3

One of the most exciting aspects of this partnership is the reach of Aave V3 itself. Currently, Aave V3 is deployed across 17 different chains, including high-profile networks such as Ethereum, Arbitrum, Avalanche, Base, and Polygon.

This wide deployment ensures that the white-label version of Aave V3 will benefit from a highly diverse and robust infrastructure.

Aave V3’s cross-chain functionality is one of its standout features, allowing users to seamlessly lend and borrow assets across multiple blockchains.

With Aave V3 already on major platforms, the Ink Foundation will have access to a large, established user base from day one, increasing the likelihood of success for the new lending platform.

Conclusion

The approval of the white-label version of Aave V3 by Aave DAO is a monumental step for both the Aave ecosystem and the broader DeFi space.

By partnering with the Ink Foundation, Kraken-backed and focused on Ethereum Layer 2, Aave is further solidifying its position as a leader in the decentralized finance industry while expanding into the institutional lending market.

The commitment of both Aave and the Ink Foundation to developing this platform, with substantial resources dedicated to attracting liquidity, shows a promising future for the partnership.

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FAQ

What is the purpose of the white-label version of Aave V3?

The white-label version of Aave V3 will allow the Ink Foundation to rebrand and operate a centralized lending platform using Aave's codebase, targeting institutional users.

How does the Aave DAO benefit from this partnership?

Aave DAO will receive a share of the revenue from the new platform, equal to or greater than a Reserve Factor of 5% based on borrow volume.

What is the Ink Foundation’s role in the partnership?

The Ink Foundation, supported by Kraken, will launch and grow a white-label version of Aave V3, including liquidity mining programs to attract significant liquidity.

Which blockchains is Aave V3 deployed on?

Aave V3 is currently deployed on Ethereum, Arbitrum, Avalanche, Base, and Polygon, allowing for cross-chain lending and borrowing.

Will the Ink Foundation work with other lending protocols?

No, the Ink Foundation has committed to not collaborating with other lending protocols for at least 12 months after launching the Aave-powered platform.