- Aave published an Aave Request for Comment (ARC) on 16 August 2022 asking token holders to back Ethereum’s proof-of-stake chain as the protocol’s canonical deployment.
- The ARC also lets Aave governance wind down deployments on any competing Ethereum proof-of-work fork.
- At the time, 72.6% of Aave’s total value locked, roughly $5.4 billion, sat on Ethereum.
- Aave said its contracts were already tested for the Merge on the Ropsten and Goerli testnets using Aave V3.
- Tether made a similar pledge days earlier, and both moves were aimed at discouraging a PoW fork from gaining traction.
Aave has issued what is known as an Aave Request for Comment (ARC). This essentially means Aave is urging its members to choose the Ethereum mainnet running on PoS as the new go-to governance system. The ARC was proposed on Tuesday, 16 August 2022.
The vote is meant to establish a consensus among members with respect to Aave deployment on Ethereum’s mainnet and Ethereum’s transition. The proposal will be made soon on the Aave governance website.
With the ARC, Aave is also giving the authorities power to shut down Aave deployments on any other Ethereum forks.
The move has to do with the fact that 72.6% or $5.4 billion of Aave’s total value locked resides on Ethereum.
In one of its Twitter updates, Aave has stated that it is fully prepared with respect to the upcoming Merge on September 15th. It also said that its codes are fully functional with regard to Ethereum’s algorithm change and that they have been tested on Ropsten and Goerli testnets deploying Aave V3.
Recently, to prevent the weaponizing of PoS to create confusion and harm, Tether announced its support for the upcoming Merge.
What happened after the Merge
The Merge went live on 15 September 2022, and Ethereum switched to proof of stake without any chain halt. A proof-of-work fork did launch, trading as ETHW, but it drew almost none of the DeFi liquidity that stayed on the PoS chain. Aave, Tether, Circle, and Chainlink all stuck with proof-of-stake Ethereum, which left lending markets on the fork with unbacked stablecoin balances and stale price feeds. Aave’s deployments continued running on Ethereum mainnet as planned.
FAQs
1. What is an Aave Request for Comment (ARC)?
An ARC is a discussion post on Aave’s governance forum. It gauges sentiment before anything binding is written, and only after that does a formal on-chain vote decide the outcome.
2. Why did Aave want to shut down deployments on Ethereum forks?
A forked chain copies every contract, including Aave’s lending pools. Stablecoins like USDT and USDC on that copy would have no redeemable backing, so borrowers could drain real collateral against worthless assets. Shutting the fork deployments removed that risk.
3. Did the Ethereum PoW fork affect ETH holders?
Holders of ETH at the time of the fork received ETHW on the forked chain. Its price fell sharply after launch, and most large exchanges and DeFi protocols continued to treat the proof-of-stake chain as Ethereum.
4. Does the Merge change how Aave works for users?
No. Lending, borrowing, and interest rates on Aave stayed the same. The change was to Ethereum’s consensus layer, not to the contracts Aave runs on top of it.
