Aave Expands to Sonic Blockchain with $15 Million Backing, Halts Polygon Lending

Aave has broadened its reach by deploying its lending markets on Sonic, a high-performance blockchain derived from Fantom, marking its first Layer 1 expansion this year. The move, which follows approval of a governance proposal from the Aave Chan Initiative, is supported by $15 million in funding from the Sonic Foundation, up to 50 million Sonic-native $S tokens, and $800,000 in stablecoins from Aave. Sonic, with over $700 million in total value locked, offers fee monetization for developers, potentially creating an additional income stream for Aave. This expansion coincides with Aave governance's decision to halt lending operations on the Polygon PoS chain due to risk concerns regarding stablecoin rehypothecation through Polygon's native bridge. Aave's total value locked across all chains exceeds $19 billion.