The Aave community is voting to execute V3 on the Ethereum mainnet. Aave is a community platform for issuing interest rates that employ algorithms to determine the platform’s liquidity and demand for borrowing.
V3 is considered one of the most significant upgrades to the Aave protocol, and Aave is Ethereum’s first and largest market. In 2019, the first version of the Aave protocols for smart contracts was introduced on the Ethereum blockchain.
While Aave V3 was deployed to various networks right after the release, the Ethereum pool was still running V2. To increase compatibility between the V3 pools and less general complexity, the community decided to deploy a fresh V3 instead of upgrading the V2 pool.
“V3 is the most significant upgrade to the Aave Protocol. Ave V3 is a protocol that highlights capital efficiency, risk management, and security,” Aave stated in its Twitter account.
The voting will end on Jan 25, 2023, at 18:58 UTC. If the mentioned proposal passes, the deployment will be implemented from Jan 27. Currently, Aave’s V3 Ethereum market includes the wBTC, wETH, wstETH, USDC, DAI, LINK and AAVE, which are already approved by the community.
Kethfinex, the spokesperson for Lido, said, “It’s a big step forward for the Ethereum DeFi space.”
Earlier in September 2022, the Decentralized Autonomous Organization (DAO) proposed retroactive funding for the deployment of V3 by the Aave company. And the company accepted the proposal to repay the workers of the Aave team with $16.3 million through retroactive funding for the development of the Aave V3 protocol.
Why V3 is important to the Aave community
V3 was created to do multiple tasks, including data science, risk management, QnA, smart contract engineering, front and back-end engineering. As per reports, in V3, 60% of work is associated with engineering roles, and the remaining 40% is associated with non-engineering roles.
New pans of Ethereum after Merge
After the merge, the next upgrade on Ethereum will be “Shanghai.” For the Shanghai upgrade, Shandong will act as a testnet. This new Ethereum upgrade will help the users to withdraw their Ether staked from the past few years systematically and securely.
Ethereum developers stated that they selected eight EIPs in the upcoming Ethereum upgrade. The major EIPs are EIP-3651, EIP-3855, and EIP-3860. The developers stated that EIP-3651 was a major one to reduce network fees for some of the key network participants known as builders, but they did not clarify when the Ethereum upgrade would happen. Currently, the team is working on EIP 4844.