On Tuesday, Mark Zeller, head of integration at decentralized finance (DeFi) lending and borrowing protocol Aave, proposed to freeze the market of Fantom v3 on the platform. Established in 2018, Fantom is a directed acrylic graph smart contract platform that provides DeFi services and to which Aave is currently connected.
Zeller explained the reason for removing the Fantom Bridge:
“Following the Harmony bridge event and the recent Nomad bridge exploit, the Aave community needs to consider the risk/benefit of maintaining an active Aave V3 market on Fantom, as this network depends on each swap (multichain) bridge.”
Zeller further explained that the Aave v3 Fantom market has not gained noticeable traction, with a current market size of $9 million and $2.4 million in open loans. In comparison, the Aave protocol has a total locked value of $3.48 billion. Meanwhile, Aave’s Fantom marketplace only generates approximately $300 per day for the borrow and lend protocol, of which $30 goes to Aave’s coffers.
If passed, the Aave Improvement Protocol will allow users to repay their debts and withdraw, but will block further deposits and loans in this market. In five days, a community vote will be held to determine the future of the Aave v3 Fantom. The Aave team wrote:
“The risk of exposing users to potentially losing millions of $ due to reasons external to Aave’s internal security is not considered worth the $30 daily fees accrued from Aave’s coffers.”
Related: Backlash as Harmony Offers to Mine 4.97B Tokens to Reimburse Victims
Multichain bridging, while lauded by some as the pinnacle of cross-chain communications, has been criticized by skeptics such as Vitalik Buterin for its perceived fragility. Earlier on Tuesday, the Nomad token bridge was drained for $190 million after hackers discovered a single-code exploit that anyone could copy, leading to a “decentralized robbery” as other users joined in the initial drain of funds from a hacker.
Following the post, Simone Pomposi, Fantom’s Chief Marketing Officer, reached out to Cointelegraph, claiming:
“Aave’s management proposal is formulated to prevent a potential connection problem; however, the real reason behind the proposal seems to be that Aave doesn’t capture enough market share in the Fantom network to justify the risk. Suggesting removing access to a decentralized app because the business model is flawed/unprofitable makes sense, but blaming it is hypothetical [related to cross-chain bridges] not fair.”