On Monday, the first cross-chain governance proposal passed on decentralized finance, or DeFi, borrowing and lending platform Aave. According to DeFi Llama, the amount of total value locked on Aave is approximately $12 billion. As told by its developers, an executed proposal on Aave, which is built on the Ethereum (ETH) network, was sent to the Polygon (MATIC) FxPortal. The mechanism then reads the Ethereum data and passes it for validation on the Polygon network.
Afterward, the Aave cross-chain governance bridge contract receives this data, decodes it, and queues the action pending a timelock for finalization. The development team wrote:
The Aave cross-chain governance bridge is built in a generic way to be easily adapted to operate with any chain that supports the EVM [Ethereum Virtual Machine] and cross-chain messaging.
1/ The first cross-chain governance proposal has successfully updated the Aave Polygon Market! This proposal from @aavegotchi is a major step forward in multi-chain governance systems✨
New assets listed include GHST, BAL, CRV, DPI, LINK, & SUSHI
A thread on this proposal:
— Aave (@AaveAave) January 31, 2022
Currently, the repository supports contracts bridging to Polygon and Arbitrum. On Aave, users can submit Aave Improvement Protocols, or AIPs, to target various features on the DeFi platform. In one instance last October, Gauntlet Network submitted an AIP to disable the borrowing functions for xSUSHI and DeFi Pulse Index tokens and an automated market maker liquidity provider token pair, citing alleged security vulnerabilities. The proposal passed with 710,327 votes in favor four days after submission.
While some blockchain enthusiasts took to social media to celebrate the technological milestone, not all stakeholders are fans of cross-chain developments. Last month, Vitalik Buterin famously gave the thumbs down to cross-chain applications, citing irreversible breaches should a 51% attack occur on one network amidst cross-chain transactions. In addition, the Ethereum co-founder warned that the scaling of cross-chain applications could also scale vulnerabilities, as hackers can cause system-wide contagions by launching 51% attacks on just one network, especially against small-cap ones.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.