Aave May Shut Down On PoW ETH Forks

The Aave DAO Is Being Asked To Commit To Proof-of-Stake Ethereum

Aave plans to exclusively support proof-of-stake Ethereum after the Merge.

According to a proposal floated today, AaveDAO, the governing body of DeFi’s biggest money market, is being asked to commit to the Ethereum mainnet running under proof-of-stake (PoS) over any forked versions following the Ethereum merge.  

If passed, the Aave protocol will be shut down on the proof-of-work (PoW) Ethereum chain.

With $7.45B in total value locked (TVL), Aave is the third-largest DeFi app in the world. Headquartered in London, it runs a decentralized non-custodial lending protocol where users can participate by borrowing or depositing assets. It was founded by Stani Kulechov and launched initially as ETHLend in a 2017 ICO, but rebranded to Aave in September 2018.

The move comes amid a push by Ethereum miners to keep the current PoW consensus mechanism going. This comes as no surprise, as the switch to PoS will make their expensive mining rigs redundant.

Indeed, several crypto exchanges like Bitmex and Poloniex have already listed PoW ETH in anticipation of activity on the forked chain. It’s currently trading around $63.

Merge Set For Sept. 15

The long-awaited Ethereum upgrade is predicted to occur on September 15 just before 4pm ET. The Merge will kick energy-intensive miners off the PoW network in favor of PoS validators and is expected to drastically reduce the network’s energy consumption. 

Justin Drake, a researcher at the Ethereum Foundation, appeared on The Defiant Podcast and predicts The Merge will scale down Ethereum’s electricity utilization by more than 99.9%.