According to Max Melcher, GTM Lead at Chainlink Labs, “Leveraging Chainlink Proof of Reserve, Aave can verify that bridged assets accepted on the platform are fully collateralized before allowing users to borrow against them”
The Aave (AAVE) DAO has voted in favor of using Chainlink’s Proof-Of-Reserves (PoR) to secure bridged assets on Avalanche (AVAX).
The proposal, concerning bridged tokens on Aave version 3 Avalanche, was put forth on December 9.
Bridged assets are used to achieve interoperability between two blockchains. These tokens are locked in their origination chain and have clones on the target chain, effectively "bridging" the two networks.
At present, Aave v3 Avalanche holds the bridged version of Dai (DAI), USD Coin (USDC), Chainlink (LINK), and Tether (USDT), among others.
The proposal noted that the architecture of bridged assets makes them vulnerable to exploitation via original and target networks. It suggested adding another form of protection in the form of Chainlink’s PoR to mitigate hacking-related threats.
The voting for the proposal began on December 18. The proposal gained overwhelming support as 99.96% of the Aave DAO voted in its favor.
The initial release will implement the Proof-of-Reserves only on Aave v2 and v3 Avalanche. The smart contract components for this update will be rolled out once Certora and SigmaPrime finalize the audits of the system.
