Aave Adopts Chainlink’s PoR System to Secure Bridged Assets on Avalanche

• Aave, the popular decentralized finance (DeFi) protocol on Ethereum, is implementing a “proof of reserve” system on Avalanche.
• This system will protect bridged assets on Avalanche, providing an extra layer of security.
• The DAO behind Aave approved Chainlink’s Proof of Reserve smart contract with a 99% vote in favor.

Aave, the popular decentralized finance (DeFi) protocol on Ethereum, is taking steps to shore up customer confidence in the wake of FTX. To do this, the protocol will be implementing a “proof of reserve” system on Avalanche, a DeFi twist on the centralized exchanges. This system will protect bridged assets on Avalanche, providing an extra layer of security.

The decentralized autonomous organization (DAO) behind Aave approved Chainlink’s Proof of Reserve smart contract by a vote of over 99% in favor. This smart contract will be specifically covering Aave versions (v)2 and v3 on the Avalanche blockchain. Bridged assets are DeFi’s way of moving value between blockchains that don’t normally communicate with each other. The asset gets locked in a smart contract on its home chain; then, a clone is issued on the target network. Aave v3 on Avalanche has bridged versions of DAI, USDT and USDC, among other tokens.

Unfortunately, the setup of bridged assets creates many security vulnerabilities, and hackers have repeatedly exploited token bridges. This year, Web3 game Axie Infinity’s Ronin network and cross-chain protocol Nomad faced exploits totaling over $800 million due to breaches on their token-bridges. To remedy this, Web3 studio Bored Ghost Developing proposed that Aave use ChainLink PoR’s aggregator smart contract to protect tokens on the original net. This proposal was approved by the DAO behind Aave, giving customers of the protocol an extra layer of security.

Ernesto Boado, the former chief technology officer at Aave and co-founder at Bored Ghost Developing, said, “The focus is more on automatically detecting and acting whenever any symptom of security issues on a bridge appears. We think that obviously, transparency goes first, in this case, our development goes a step further.”

Aave’s implementation of the “proof of reserve” system on Avalanche is a crucial step in the DeFi space. It will help mitigate attacks on bridged assets, providing an extra layer of security for customers of the protocol. The DAO behind Aave approved Chainlink’s Proof of Reserve smart contract with a 99% vote in favor, demonstrating the community’s commitment to the security and reliability of their protocol.

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