Kraken to Launch Aave Alternative on Its Own L2 Solution

The team at Ink Foundation has proposed deploying a customized white-label version of the Aave V3 lending protocol on its platform.

Ink Foundation is a non-profit organization that supports the eponymous L2 network from the Kraken exchange.

If approved, Aave DAO will gain a new revenue stream, while Ink will acquire a ready-made lending infrastructure.

The initiative was backed by 99.8% of the voting participants.

According to the proposal, the management of the new protocol version will be centralized and remain with Ink Foundation. A governance token is not planned.

Service providers of Aave DAO, including ACI and Chaos Labs, will support the platform for the first six months. After this period, Ink Foundation will enter into a commercial agreement with them.

The decentralized autonomous organization will receive a share of all project revenues. The allocation will be at least 5% of the borrowing volume. However, the new platform will not be covered by Aave’s insurance fund.

Ink Foundation commits to using the platform’s solution exclusively for at least 12 months and will not partner with other lending protocols.

To attract initial liquidity, Ink Foundation will allocate 4% of the future supply of its governance token. It is expected that this will help attract more than $250 million to the platform.

Aave DAO will also incentivize users through rebates and rewards for providing liquidity in GHO or AAVE tokens.

Aave in the Lending Segment

The crypto lending sector ranks second in DeFi Llama’s ratings. In terms of TVL, it has surpassed restaking, cross-chain bridges, and DEXs.

Aave leads the lending segment with $33.55 billion. The protocol is deployed across 17 networks, including Ethereum, Arbitrum, Avalanche, Base, and Polygon.

In July, Aave became the first lending protocol whose net deposits exceeded $50 billion.