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Conflict between Polygon and Aave reveals rupture in the DeFi ecosystem
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Polygon, one of the largest layer-2 Ethereum networks, accused decentralized lending platform Aave of adopting monopolistic practices. The clash arose following a controversial proposal that aimed to allocate funds blocked in bridges to income-generating strategies, a measure which Aave opposed.
Tension in the DeFi sector increased after the lending protocol threatened to withdraw its deployment on the Polygon network.
The Polygon community rejected the proposal. In a statement released on December 17, Polygon stated that the Aave resorted to threats after initially supporting a similar proposal.
According to Polygon, the opposition of the Aave protocol is related to the participation of Morpho, a competing protocol, whose proposal gained support due to the promise of significant subsidies for the ecosystem.
DeFi: conflict between Polygon and AAVE
The founder of Polygon, Sandeep Nailwalcriticized Aave’s stance as anti-competitive and harmful to the spirit of Web3. Nailwal highlighted that a previous Aave proposal did not gain the same support as Morpho’s, which offered substantial benefits to the Polygon ecosystem.
He further reiterated Polygon’s commitment to a competitive and decentralized DeFi ecosystem that serves the interests of users and developers.
About that, Marc Boiron, CEO of Polygon Labsalso accused Aave of using intimidation and centralized governance to suppress competitors. Boiron reported that members of the Aave team sent direct messages trying to dissuade Polygon’s governance from supporting Morpho’s proposal.
On the other hand, the founder of Aave, Stani Kulechovdefended the protocol’s position, arguing that the DAO acted to protect users against third-party risks. He stated that governance decisions reflect a commitment to user safety, rejecting accusations of anti-competitive behavior.
Amid this struggle in the DeFi sector, the prices of digital assets fluctuated. The POL token (ex-Matic), for example, fell 7.0% in the last 24 hours, according to data from CoinGecko. At the time of writing this article, Polygon’s crypto asset is costing US$0.55.
Meanwhile, the AAVE token price rose around 1.0% in the same period to the current price of US$373.67. It is worth mentioning that this upward movement in AAVE is related to the decentralized finance (DeFi) project World Liberty Financial, associated with Donald Trump’s family. This is because the project invested $1 million in AAVE token last week.
Conflict between Polygon and Aave reveals rupture in the DeFi ecosystem
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Conflict between Polygon and Aave reveals rupture in the DeFi ecosystem
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Conflict between Polygon and Aave reveals rupture in the DeFi ecosystem
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Conflict between Polygon and Aave reveals rupture in the DeFi ecosystem
