Decentralized finance (DeFi) firm Aave is working with Ethereum layer 2 Polygon to address the congestion currently experienced on the second-largest public blockchain.

Announced Wednesday, Aave will be exploring scalable sidechains with Polygon (formerly known as Matic) to escape the high transaction fees that currently exist on Ethereum. Aave says it will use a soon-to-be available smart-contract bridge that will seamlessly port assets from one network to the other. 

The “DeFi Summer” of 2020 has not really slowed down, with close to $43 billion currently locked within DeFi lending platforms. Built on Ethereum, Aave, a DeFi protocol aimed at both retail and institutional clients, has a market size of $5.41 billion, making it the third largest in the sector, according to DeFi Pulse.

“High transaction fees are a feature of a successful public blockchain, as they define actors ready to pay the market price to use and secure decentralized services,” Aave founder Stani Kulechov told CoinDesk via email, adding:

“That being said, DeFi was always intended to create a sustainable and more inclusive alternative to traditional finance. If DeFi is great but only limited to portfolios of five figures and up, DeFi will be falling short of its mission to be finance for everyone.”

Polygon’s latest get

The Polygon network is powered by DeFi’s omnipresent data oracle service Chainlink, allowing the Aave protocol to maintain the highest standard of safety for the protocol price feeds, Kulechov pointed out.

At launch, the Aave Market on Polygon will onboard Polygon’s native MATIC token as collateral, as well as USDC, USDT, DAI, WETH, AAVE and WBTC.

In addition to creating a sidechain that allows fast and nearly free transactions, Polygon’s ecosystem of apps includes community favourites Aavegotchi and decentralized exchange Quickswap. 

A sidechain on Ethereum refers to any mechanism that allows tokens from the layer 1 mainchain to be securely used within a completely separate blockchain but still moved back to the original chain if necessary. 

“One of the main benefits of DeFi is the ability to build synergies with other projects,” Kulechov said. “By providing wide access to Aave, there’s no need for a ‘winner-takes-all’ scalability solution and users can choose the solution they feel comfortable with.”

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