Aave DAO Rethinks Multichain Expansion in Phase 1 of V3 Strategy Reset

• Aave DAO has proposed a narrowing of Aave V3’s footprint to exit blockchains that have contributed little to the network, starting with zkSync, Soneium and Metis.
• The three chains have had few transactions and show no sign of future growth but incur costs for Aave in monitoring and governance operations.

Aave DAO is rethinking its multichain strategy in favor of concentrated efforts in its most high-value networks, and it’s starting by exiting three chains it says add little value to its ecosystem.

The DAO released a new Aave Request for Comment (ARFC) this week proposing a change in strategy. Titled ‘Focusing the Aave V3 Multichain Strategy – Phase 1,’ the proposal wants the network to exit three blockchain networks: zkSync, Soneium and Metis. It claims that these exits would reduce operational overhead and the burden of governance that Aave incurs for “instances that are clearly not viable today.”

The proposal notes that Aave V3 was designed to maintain multiple live deployments across various networks. However, this doesn’t come for free. Each deployment incurs operational and maintenance costs and governance overhead for asset maintenance. The DAO has observed that some instances have very few users and generate insignificant revenue. Still, they require a ‘non-trivial’ amount of maintenance from the network.

zkSync, Soneium and Metis were identified as some of the top culprits. “Continuing to operate these markets in their current state provides little upside while consuming attention better spent elsewhere,” Aave DAO believes.

Aave DAO: New Deployments Must Guarantee $2M in Annual Revenue

Exiting the three chains is only the beginning. The DAO is setting new standards for any chain that wants to integrate its DeFi protocol to avoid a repeat of such instances. Moving forward, any new deployment must first guarantee that it can generate at least $2 million in annual revenue.

Aave DAO believes this standard is justified. After all, any chain that deploys its protocol stands to gain significantly as Aave operates the largest DeFi protocol in the market. According to DeFiLlama, Aave has the highest total value locked at $29.75 billion and generated $26.12 million in fees over the past 7 days. It’s currently deployed on 18 chains, and at its peak in October last year, held $45 billion in TVL.

Any new chain that deploys Aave taps into this rich and diverse market, and therefore, the DAO can no longer support networks that contribute little to its goals. It stated:

The proposal is aimed at reducing overheads and increasing the revenue, which, as we reported, Aave Labs wants to share with the users.

AAVE trades at $121.9 at press time after dipping 4.8% in the past day, which brought its total losses in the past week to 24%.