Decentralized finance (DeFi) has its fair share of ‘forks,’ but rarely do they top the total value locked (TVL) charts. Linea, the zero-knowledge rollup ‘bootstrapped’ by Consensys, claims to be ‘home to the most innovative web3 projects.’ But its largest project, ZeroLend, is a seemingly low-effort fork of Aave, the widely-established lending protocol.
As noted by X (formerly Twitter) user @majinsayan, ZeroLend’s mobile site until very recently even redirected to Aave’s own FAQ section.
At $235 million TVL, ZeroLend accounts for over a third of the blockchain’s entire $667 million TVL, according to data from DeFiLlama.
‘Forking,’ common in DeFi, is the practice of copying an existing project’s code for reuse and, ideally, further development.
Oft-forked Aave is the biggest protocol in DeFi — ignoring Lido and Eigenlayer which offer ETH staking and re-staking, respectively — with $11.6 billion of TVL across 12 chains.
Many forks of Aave, and similar lending protocol Compound, have been deployed over the years, and have often fallen victim to hackers. Recent examples include Radiant Capital, which lost $4.5 million in January, and Michael Patryn’s UwU Lend, which was hacked for $20 million one month ago.
Despite this, the original codebases are widely considered amongst the most secure in the sector, with any changes only possible via decentralized governance and on-chain voting.
While this may be comforting for even the most risk-averse crypto users, such as addresses labeled as the US government, it’s not without its own problems, given that any bug fixes take time to implement.
Friends don’t fork friends
Back in March, Aave governance delegate Marc Zeller described ZeroLend as “the Aave codebase with a high inflation shitcoin slapped on top.”
The comment came in response to ZeroLend’s governance forum post suggesting that Aave recognize them as a ‘friendly fork,’ offering to share revenue and a portion of their ZERO token airdrop in return.
Zeller didn’t seem keen on the reputation risk in associating Aave with one of the many unsanctioned spin-offs, however, hazarding that ZeroLend “only has one likely outcome, onboarding the wrong collateral or Oracle, or pushing a wrong config and getting featured in Rekt News.”
ZeroLend had been seeking a similar setup to MakerDAO’s SparkLend, which has been endorsed by Aave under a similar revenue sharing proposal since it passed in March 2023.
Despite this, Spark also found itself on Zeller’s radar last week. He accused MakerDAO of ‘creative accounting,’ leading to a revenue share calculation at ‘much closer to 1%,’ rather than the agreed upon 10%.
Zeller is no stranger to inter-DAO controversy, hitting out at Gauntlet and Morpho earlier this year, and criticizing the same pair’s risk management strategy in the wake of Renzo’s ezETH depeg. He then branded as “reckless” MakerDAO’s decision to onboard Ethena’s ‘synthetic dollar’ as collateral.