Executive Summary

Aave v3, a prominent DeFi protocol, will launch on OKX's Ethereum Layer 2, X Layer, in the coming weeks. This move aims to enhance liquidity and leverage LayerZero’s USDT0 for improved cross-chain functionality within the Web3 ecosystem.

The Event in Detail

Aave v3, a leading decentralized finance protocol, is scheduled for deployment on X Layer, the Ethereum Layer 2 solution incubated by the centralized cryptocurrency exchange OKX, in the coming weeks. This strategic integration is a key component of X Layer's broader initiative to incorporate advanced decentralized solutions. A central aspect of this launch includes the integration of LayerZero’s USDT0, designed to enhance network functionality and provide unified liquidity.

This marks a significant expansion for the Aave protocol, following its prior deployments on other Layer 2 networks, such as ZKsync Era in August 2024. On ZKsync Era, Aave v3 aimed to unlock scalability, improve privacy, and enhance security, supporting assets like USDT, USDC, WETH, and wstETH.

Financial Mechanics & Business Strategy

X Layer operates as an EVM-compatible Layer 2 blockchain, prioritizing scalability and efficiency while maintaining Ethereum-level security. It is fully integrated with OKX Wallet and OKX Exchange, designed to provide a seamless user experience with reduced transaction costs. Technical enhancements, including a "PP upgrade" developed in collaboration with Polygon, have increased throughput to 5,000 transactions per second (TPS) and significantly lowered gas fees.

A pivotal element of this strategy is the partnership between OKX and Tether to integrate USDT0 across X Layer, OKX Wallet, and OKX Exchange. This integration enables direct deposit and withdrawal of USDT0, fostering access to unified and composable liquidity across diverse DeFi ecosystems. USDT0, leveraging LayerZero's Omnichain Fungible Token (OFT) standard, establishes a single canonical version of USDT, thus eliminating the complexities of wrapped tokens and consolidating liquidity. The stablecoin currently supports deep liquidity across major networks including Arbitrum, Optimism, Polygon, Berachain, and Unichain, and has recorded over $11.3 billion in bridge volume.

X Layer's strategic focus extends to addressing on-chain perpetuals, decentralized finance, global payments, and Real-World Assets (RWA). To foster ecosystem growth, OKX plans to establish an ecosystem fund and offer liquidity incentives to developers. The OKB token, which serves as the sole gas and native token for X Layer, underwent a significant economic model upgrade. This included the phasing out of its Ethereum L1 version and a one-time burn of 65,256,712.097 OKB tokens on August 15, 2025, fixing its total supply at 21 million, akin to Bitcoin's scarcity model. X Layer has demonstrated rapid growth, processing 2.05 million transactions on August 16, 2025, surpassing Ethereum's daily transaction count on that date.

Market Implications

The launch of Aave v3 on X Layer is anticipated to significantly enhance liquidity and utility for both platforms. This move is expected to attract a new cohort of users and developers, consequently expanding Aave's protocol and strengthening X Layer's ecosystem. The integration of USDT0 directly addresses the fragmentation of stablecoin liquidity across various chains, aiming to consolidate it and simplify the user experience, thereby reinforcing stablecoins as foundational elements of on-chain finance.

X Layer's focus on on-chain perpetuals, DeFi, global payments, and RWA signifies a strategic initiative to establish itself as a core infrastructure layer for digital value exchange. This positioning is poised to accelerate the mainstream adoption of stablecoins within global financial systems.

Expert Commentary

Executives at OKX have characterized X Layer as a foundational element for digital value exchange, underscoring the platform's commitment to providing stable omnichain liquidity. They indicate that this integration aims to bridge centralized and decentralized finance with enhanced speed, simplicity, and interoperability. Additionally, representatives associated with USDT0 have articulated that stablecoins are increasingly forming the bedrock of on-chain finance, and USDT0's presence on OKX and X Layer offers millions of users and builders access to unified, cross-chain liquidity at scale.

Broader Context

This development aligns with the prevailing trend of major DeFi protocols expanding onto Ethereum Layer 2 networks to capitalize on scalability improvements, reduced transaction costs, and heightened security. The extensive integration with USDT0 and X Layer's multichain infrastructure strategy underscores a broader industry push towards a unified Web3 ecosystem, effectively bridging centralized exchanges with decentralized markets. X Layer's aggressive growth trajectory and strategic technical upgrades signal its intent to capture significant market share and drive user adoption within the increasingly competitive Layer 2 landscape.