TL;DR
- Aave Labs and Sky (formerly MakerDAO) have launched the Sky Aave Force initiative to integrate decentralized finance (DeFi) with traditional finance (TradFi), aiming to create a more inclusive financial system.
- Key initiatives include integrating USDS and Savings USDS (sUSDS) into Aave V3, offering native token rewards, and launching a new market with Spark.Fi to boost liquidity and user participation.
- The initiative also plans to enhance liquidity through a Direct Deposit Module (D3M) for USDS in the Aave Lido Market, starting with a $100 million debt cap, to support the growth and scalability of the DeFi ecosystem.
Aave Labs and Sky (formerly MakerDAO) have announced the launch of the Sky Aave Force initiative, a groundbreaking effort aimed at integrating DeFi with TradFi. This initiative, conceived by Sky’s Rune Christensen and Aave Labs’ Stani Kulechov, seeks to create a more connected and inclusive financial system.
Turbocharging DeFi: Introducing Sky Aave Force pic.twitter.com/foY4LqQj6j
— Aave Labs (@aave) September 3, 2024
Aave Labs and Sky: Bridging DeFi and Traditional Finance
The Sky Aave Force initiative comes at a crucial time for DeFi. These protocols have grown and shown impressive durability and relevance, proving to be solid options compared to traditional financial systems.
Kulechov highlighted how DeFi could transform the world of finance by making it more accessible and encouraging new ideas. He mentioned, “DeFi can empower all of finance,” showing how the industry is moving from being a small player to a key component of the financial landscape.
New Initiatives to Drive DeFi Growth
A major idea behind Sky Aave Force is to bring USDS and Savings USDS (sUSDS) into Aave V3. This strategy is all about drawing in users with native token rewards, boosting liquidity, and getting more people involved in the stablecoin markets on Aave.
Additionally, a new market will be created in partnership with Spark.Fi, is designed to offer smooth user experiences and exclusive rewards, further encouraging the use of DeFi solutions.
Sky Aave Force is gearing up to launch an incentive program for sUSDS suppliers on the Aave V3 Main Market. This initiative will feature a pre-farming airdrop, giving away 3.33 million SPK tokens each month, which accounts for 50% of the SparkLend rewards.
The aim here is to boost how effectively we use capital by making sUSDS the main asset, while any unused funds keep racking up the Sky Savings Rate (SSR). This approach is designed to beat out other stablecoins like USDC and USDT, making sUSDS a more appealing option for users and attracting new borrowers to the platform.
Enhancing Liquidity through New Integrations
Another key suggestion is to roll out a Direct Deposit Module (D3M) for USDS in the Aave Lido Market, starting with a debt cap of $100 million.
This project is all about increasing the liquidity of USDS and wstETH by pouring a significant amount of money into Aave’s stETH market. The debt limit can be tweaked according to demand, which helps the DeFi ecosystem grow and scale effectively.
The Sky Aave Force initiative represents a joint effort by Aave Labs and Sky to integrate DeFi more deeply into mainstream finance. With Aave as the largest lending platform in DeFi, holding over $11 billion in TVL across various chains, this partnership aims to find new synergies and drive innovation.
