Liquidity Mining Comes to Lending Protocol Aave V2

Liquidity Mining Comes to Lending Protocol Aave V2

This latest feature in Aave, which currently accounts for 17% of the crypto lending sector with Compound in the lead with 53% share followed by MakerDAO at 30%, could be expected to “kickstart DeFi Summer 2.0.”

Liquidity mining is officially coming to lending protocol AAVE as Aave Improvement Proposal 16 gets passed with 62% support.

Introduced last week, the AIP introduces liquidity mining rewards for Aave V2. As per this proposal, 2,200 Staked AAVE (stkAAVE) will be distributed per day, representing around $1 million in rewards distributed daily to lenders and borrowers.

stkAAVE are rewarded instead of AAVE in order to align long-term incentives, disincentivize speculative farmers, and allow users to earn an underlying yield on top of the AAVE they earn.

According to the proposal, this will give LPs more governance weight up front and secure the protocol by increasing the amount of AAVE staked in the Safety Module.

These rewards will be allocated on a pro-rata basis across the markets based on the dollar value of the borrowing activity in the underlying market.

Estimated APR is, for DAI 12.67% – 37.6% on supply and borrowing respectively, on USDT 14.25% – 41.7%, on USDC 15.87% – 43.2%, on ETH 5.65% – 1.65%, and on BTC 6.25% – 1.85% ETH 11.54% Ethereum / USD ETHUSD $ 2,534.69
$292.5011.54%
Volume 34.96 b Change $292.50 Open $2,534.69 Circulating 115.63 m Market Cap 293.09 b
5 h Tether Surpasses $50 Billion Market Cap As Coinbase Pro Adds USDt 7 h Ethereum Targeting October for The Merge through Scaling Project ‘Rayonism’ 8 h Liquidity Mining Comes to Lending Protocol Aave V2
BTC 10.90% Bitcoin / USD BTCUSD $ 53,972.62
$5,883.0210.90%
Volume 58.08 b Change $5,883.02 Open $53,972.62 Circulating 18.69 m Market Cap 1.01 t
5 h Social Investment Network, eToro, Adds ‘Bitcoin Value Chain’ Stock Portfolio Tracking 5 h Tether Surpasses $50 Billion Market Cap As Coinbase Pro Adds USDt 8 h Liquidity Mining Comes to Lending Protocol Aave V2

The motivation behind introducing liquidity mining rewards is to grow lending and borrowing activity in targeted markets, now that almost every major DeFi protocol is launching a liquidity mining program.

Rewarding AAVE to users also leads to broader distribution and protocol decentralization, ti said.

In response to this, the price of AAVE surged more than 20% to $387. The $4.86 billion market cap coin is currently up 330% YTD.

According to some, this AIP could turn out to be “monumental” for DeFi and very well be the “catalyst to kickstart DeFi Summer 2.0,” just like Compound Finance’s liquidity did the original DeFi summer.

“This comes together to form a reasonable narrative for why ETH-based DeFi apps are due a re-rating,” said Wangarian, Capital allocator at DeFiance Capital.

Aave currently accounts for 17% of the lending sector in the crypto market, with Compound in the lead, having captured 53% of the market share, followed by 30% by MakerDAO. COMP 1.66% Compound Coin / USD COMPUSD $ 0.00
$0.001.66%
Volume 49 Change $0.00 Open $0.00 Circulating 53.73 b Market Cap 48.71 K
8 h Liquidity Mining Comes to Lending Protocol Aave V2 1 w Citibank Covers DeFi, says Open Financial Platform Enables ‘Greater Innovation and Competition’ 2 w Total Value Locked (TVL) in DeFi Surpasses $100 Billion; Revenue is Ready to Hit $1 Bln
MKR 6.02% Maker / USD MKRUSD $ 4,016.19
$241.776.02%
Volume 297.03 m Change $241.77 Open $4,016.19 Circulating 995.24 K Market Cap 4 b
8 h Liquidity Mining Comes to Lending Protocol Aave V2 1 w Citibank Covers DeFi, says Open Financial Platform Enables ‘Greater Innovation and Competition’ 2 w MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi

The number of outstanding loans has reached ATH of ~ $10b across Aave, Compound, and MakerDAO.

The lending sector went parabolic during Q1 2021, with DeFi’s most popular lending platforms reaching the highest ever $25 billion.

Read Original/a>
Author: AnTy

MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi

MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi

The proposal will help MakeDAO gain capital efficiency, make DAI the primary choice for borrowers on Aave, accumulate AAVE, and proliferate DAI across Aave markets on every L2.

MakerDao proposes a Direct Deposit Dai Module (D3M) to join Maker with another DeFi blue-chip lending protocol Aave more closely.

This will allow the Maker protocol to enforce a maximum variable borrow rate on the Aave DAI market.

MakerDAO is the protocol that mints the DAI stablecoin, which has a market cap of $3.19 billion and acts as a hedging tool and medium of exchange directly on-chain.

DAI, USDT, and USDC are the dominant stablecoins in the decentralized finance sector currently, with the lending rate going as high as 10-12% and borrowing rate up to 19%, as per DeFi Rate.

According to the proposal, over-collateralization is the basis of DeFi with more collateral present than the asset minted, providing room for incentivizing a third party to pay back the debt on behalf of borrowers.

And “MakerDAO protocol is heavily overcollateralized,” it states. The proposal further mentions that the protocol has also proved itself to be resilient during the March crash.

The D3M explores an alternative path to bring more liquidity in secondary DAI venues by minting DAI backed by aDAI and a potential new tool to stabilize DAI peg. aDai is an automatically-generated, native token to the Aave protocol issued to a user who supplies DAI into the Aave protocol. AAVE 5.71% Aave / USD AAVEUSD $ 377.85
$21.585.71%
Volume 261.74 m Change $21.58 Open $377.85 Circulating 12.48 m Market Cap 4.71 b
6 h MakerDao Proposes D3M to Integrate with AAVE & Expand Stablecoin DAI Across DeFi 1 d Bitcoin Takes A Dive & Altcoins’ Drop Hard, But People Are Still ‘HODLing and Not Selling’ 1 d Balancer Labs Has ‘Zero’ Involvement in Algorand; V2 Launch is the Sole Focus

According to Sam MacPherson, smart contracts facilitator at Maker (MKR), this will benefit both the protocol. For Aave leverage seekers, it means not getting stuck in a position with double digits interest rates, and for Maker, DAI supply expansion to reduce reliance on USDC.

This proposal will further help Maker attract borrowers, more revenue, expand DAI supply, and if Aave starts a Liquidity Mining program, then collecting AAVE and earning governance rights in it.

The Aave community is deploying new liquidity pools across various L2 solutions, which means more DAI can bridge into pools to transact affordably. Aave can essentially become the distributor for DAI on every L2.

All of this will be achieved by the D3M module mining and directly depositing freshly minted DAI into the Aave V2 protocol.

“The D3M has a target rate for limiting the size of the deposit and ensuring DAI to be the most competitive asset to be borrowed on Aave compared to other stablecoins,” states the proposal.

MakerDAO basically aims to expand its stablecoin across DeFi and ensure its market position amidst the rise of new stablecoins.

“Yet another example of how deeply integrated Maker is across DeFi,” commented Ryan Watkins, a researcher at Messari. “Now becoming a bank for banks.”

Read Original/a>
Author: AnTy

Ethereum’s Layer-2 Solution, Polygon (MATIC) Welcomes Aave and Zapper to Boost DeFi Activity

Ethereum’s Layer-2 Solution, Polygon (MATIC) Welcomes Aave and Zapper to Boost DeFi Activity

As the decentralized finance ecosystem, popular as DeFi, continues to grow at a winged pace, Ethereum gas costs are surging to the roof, forcing investors to look for new faster, and cheaper blockchains. Polygon, an Ethereum layer two solutions, is emerging as the preferred solution as two major DeFi platforms – Aave and Zapper – joined the platform on Wednesday.

Decentralized lending firm, Aave AAVE 0.52% Aave / USD AAVEUSD $ 376.95
$1.960.52%
Volume 343.06 m Change $1.96 Open $376.95 Circulating 12.46 m Market Cap 4.7 b
2 h Ethereum’s Layer-2 Solution, Polygon (MATIC) Welcomes Aave and Zapper to Boost DeFi Activity 2 d Ethereum Wallet, Dharma, Integrates with DeFi Blue-Chips for Direct Access to Bank 6 d SushiSwap Launches A ‘Game-Changer;’ BentoBox’s 1st DApp Is Kashi Lending & Margin Trading
, will integrate scalable sidechains with Polygon, formerly Matic Network, to address the rising congestion and high gas fees experienced on Ethereum. The team plans to integrate a soon-to-be-released smart contract allowing users to seamlessly port assets across blockchains.

“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.”

Stani Kulechov Aave Founder

The DeFi field has in the past favored those with thousands of dollars to invest while effectively locking out the small spenders. In a blog post on the Aave Medium page, Kulechov states the recent integration with Polygon will bring “inclusivity in the DeFi space,” allowing investors with only hundreds of dollars to participate as well.

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

At launch, Aave will introduce seven assets available for lending and borrowing on the platform.

Zapper, portfolio management, and batched transaction network is also joining the Polygon network, a statement confirmed on Wednesday. Polygon will be the first in line with Ethereum scalability solutions with plans to integrate Optimism, Binance Smart Chain, and Arbitrum on the way.

With Polygon’s integration, Zapper will enable Ethereum-to-Polygon transfers allowing cross-chain “zap” transfers — its term for multi-transaction, single-click deposits, and withdrawals.

The new partnership will also enhance sending funds from Aave to Polygon, DeFi Dad of Zapper stated in a tweet.

Earlier in February, Matic Network rebranded to Polygon to enable Ethereum ETH 2.97% Ethereum / USD ETHUSD $ 1,972.51
$58.582.97%
Volume 30.55 b Change $58.58 Open $1,972.51 Circulating 115.29 m Market Cap 227.42 b
2 h Ethereum’s Layer-2 Solution, Polygon (MATIC) Welcomes Aave and Zapper to Boost DeFi Activity 7 h Enjin (ENJ) Raises $18.9M to Build Out Efinity Parachain, Bringing NFT’s to Polkadot (DOT) 11 h Bitcoin Closes its Best Quarter in 8 Years, With 103% Gains
to compete with its rivals such as Polkadot. DOT 4.05% Polkadot / USD DOTUSD $ 37.69
$1.534.05%
Volume 2.81 b Change $1.53 Open $37.69 Circulating 925.06 m Market Cap 34.86 b
2 h Ethereum’s Layer-2 Solution, Polygon (MATIC) Welcomes Aave and Zapper to Boost DeFi Activity 7 h Enjin (ENJ) Raises $18.9M to Build Out Efinity Parachain, Bringing NFT’s to Polkadot (DOT) 11 h Bitcoin Closes its Best Quarter in 8 Years, With 103% Gains
The sidechain scalability solution enables significant throughput increase while reducing the fees incurred on Ethereum transactions.

Read Original/a>
Author: Lujan Odera

Bitwise 10 Large Cap Index Adds AAVE and Uniswap; CIO Calls DeFi Inclusion a ‘Milestone Event’

Bitwise 10 Large Cap Index Adds AAVE and Uniswap; CIO Calls DeFi Inclusion a ‘Milestone Event’

The DeFi virus is spreading.

Cryptocurrency asset manager Bitwise Asset Management has added two new DeFi blue chips to its Bitwise 10 Large Cap Crypto Index as part of the January month-end index rebalance.

“DeFi assets entering the Bitwise 10 Large Cap Crypto Index is a milestone event,” said Matt Hougan, Chief Investment Officer at Bitwise.

The Bitwise 10 Large Cap Crypto Index (BITX) tracks a total return of the 10 largest crypto assets, which is measured and weighted by their free-float market capitalization and is currently trading at $36,286.

The Index now tracks Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), EOS, Tezos (XTZ), Stellar (XLM), Chainlink (LINK), Uniswap (UNI), and Aave (AAVE). Hunter Horsley, chief executive officer at Bitwise, said,

“The last few weeks has seen de-platforming & censorship by some of our country’s leading companies. In response, new decentralized services—with no corporation, executives, or board—are growing in popularity. Today, the 1st decentralized exchange (UNI) entered the Bitwise 10.”

Just last month, Bitwise liquidated its just over $9 million worth of position in XRP, representing approximately 3.8% share of the Fund, in response to the US Securities and Exchange Commission (SEC) suing Ripple And its top executives for allegedly selling unregistered securities XRP.

“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws,” said the company at the time.

Bitwise is not the only one to provide its clients exposure to the world of decentralized finance through the popular DeFi tokens. As we reported, the largest asset manager Grayscale Investments has also filed with the SEC for several single-asset trusts that cover various DeFi tokens, including Aave.

Read Original/a>
Author: AnTy

Korean Ministry of Science DeFi Report; Covers AAVE, COMP, UNI, SUSHI, SNX, & More

Korean Ministry of Science Publishes a Report on DeFi, Covers AAVE, COMP, UNI, SUSHI, SNX, and Others

DeFi can replace a large part of the work of traditional financial institutions but “still not much demand for DeFi in real life,” it says.

The Korean Ministry of Science and ICT and the Korea Internet & Security Agency has published a report covering the booming decentralized finance (DeFi) sector in detail.

“The DeFi market is growing rapidly,” states the report while covering the different aspects of the sector, including TVL, with the project Maker having the largest shares of the ecosystem with DEXs and lending services the largest share by category.

It further points to the number of unique active wallets (UAW) as well as customer deposits that show that the DeFi market is growing.

The research was conducted jointly by Block Media Co., Ltd. and Chain Partners Co., based on the Blockchain-based innovative finance ecosystem research service project of the Korea Internet & Security Agency (KISA). It also clarifies that this does not represent the official opinion of the government.

The report ‘Blockchain-based innovative finance ecosystem research’ gives a brief introduction of different DeFi projects, including blue chips like AAVE, Uniswap, Sushiswap, and Synthetix.

image1

“DeFi aims to build a financial system in the form of P2P without a central agency or intermediary based on smart contracts of blockchain technology.”

While DeFi is mainly used in the mortgage loan sector, it noted that “there is high hope that it can be expanded to many financial sectors such as asset management, derivatives, and insurance in the future.”

“In fact, there is also the possibility of replacing a large part of the work of traditional financial institutions,” states the report only to mention that “there is still not much demand for DeFi in real life,” because of the infrastructure which is not easy to build. Additionally, the goal of providing financial services to everyone without a bank account is still a long way to go.

As for all the money and interest focused on DeFi, that is because there is a lot of demand for investment purposes — “many investors are paying attention to DeFi on the news that profits of tens to hundreds of percent are generated in the era of low-interest rates,” with many similarities with the derivatives market.

The report says that the market was created with good intentions allowing anyone to easily use financial services such as loans, transactions, and investments without unnecessary intermediaries.

But there can, of course, be side effects, as was the case with ICOs, which the report says was “a very good system for start-ups where it is difficult to raise funds and investors who are difficult to recover investments in the middle.”

With DeFi, the entry barrier is too high, too, as it requires Metamask. Not to mention, there is no customer center. In other words, although DeFi has relieved credit risk to some extent, it is also a homework that a lot of management risk still remains, it reads.

With no obligation to verify customer identity (KYC), there is a high concern that it could be used for illegal money flow as well. As the scale of DeFi increases, regulatory authorities have no choice but to increase the monitoring of DeFi, “which may lead to a contraction of the DeFi market,” it said. The report reads,

“It can be seen that DeFi is performing a more fundamental digital transformation in that it is attempting the maximum amount that can be implemented in a program for financial logic.”

Read Original/a>
Author: AnTy

DeFi Season in Full Swing; Blue Chip Tokens Climbing Up the Ranks

DeFi tokens exploding yesterday with Cream (55.5%), SYN (55%) MTA (46%), 1inch (34%), AAVE (28%), bzrx (26%), SWRV (24%), UMA (22%), and UNI (21%) leading the market.

This had the total value locked (TVL) in decentralized finance (DeFi) at a new ATH above $23.85 bln, DeFi Pulse.

Meanwhile, the market cap of the top 100 DeFi tokens has reached $30 billion.

These gains result in DeFi tokens gaining higher ranking in the entire cryptocurrency market, with Polkadot (DOT) replacing XRP at 4th space, with Uniswap (UNI), Aave, and Synthetix (SNX) particularly climbing up the ranks to become 17th, 18th, and 23rd (now 24th) largest crypto assets by market cap.

Given the development and repricing, DeFi tokens see it won’t be long before several of them join the top 10.

Power of on-chain cash flow

In this past week, HGET (88.8%), CREAM (88%), AAVE (70%), SUSHI (55%), CRV (55%), PEPP (54%), UNI (47%), MTA (39%), 1inch (35%), and RUNE (34%) recorded significant gains.

Cream’s gains are the result of the launch of the road to Cream V2, which aims to become the Iron bank, which “actually *creates* value for tokens like YFI and ALPHA,” which was “previously impossible,” says Kyle Samani, Managing Partner at Multicoin Cap.

YFI, currently trading around $33,420, recently announced the proposal of buying back the crypto asset, and much of the community has come out in support of this.

When it comes to Sushiswap, its TVL has hit the milestone of $2 bln.

The token SUSHI is also enjoying the greens, surging past $7, bringing the market cap of $924 million.

The DEX project has come a long way since its controversial start, steadily growing its liquidity and volume, both of which are also hitting new highs.

The same is the case for fees that have surpassed $2 million on a daily basis. Sushiswap actually incentivizes LP and token holders by charging traders a 0.30% fee on each trade, out of which 0.25% goes to LPs and 0.05% to those staking xSUSHI.

“The power of on-chain cash flow: over 58% of the circulating SUSHI supply is locked in xSushi, earning a double-digit annualized earnings yield. Coins being accumulated on centralized exchanges and moved into on-chain yield-bearing contracts is a welcome development,” noted Max Bronstein, who previously worked at Coinbase.

Still, Sushiswap’s valuation relative to sales has decreased by 40% during all this growth.

DeFi’s stablecoin not stable

Maker is also finally enjoying this uptrend as it retakes its dominant position in the space, currently at 17.84%, with its TVL surpassing a whopping $4.26 bln.

The Ethereum-based MKR is a governance token for MakerDao as well as Maker’s decentralized lending platform. The latest success in the value of the project is attributed to the increase in the supply of its stablecoin DAI.

DAI’s market cap has grown to $1.3 bln as per Coingecko, up from $129.5 mln on July 1st, 2020.

Unlike DAI, other DAI stablecoins are anything but stable with BASED trading at $0.94, AMPL $0.88, DSD $0.79, DEBASE $0.87, SHARE $0.69, ESD $0.57, and BSD $0.33.

Read Original/a>
Author: AnTy

Even Billionaires Complain About the High DeFi Uniswap Fees; Aave Users Get Excited

Even Billionaires Complain About the High DeFi Uniswap Fees; Aave Users Get Excited

“Defi has incredible potential,” says Mark Cuban but cautions that much like derivatives, “risk never leaves the system” here as well.

Ethereum is notorious for its extremely high fees when the network activity amps up.

In January, with ETH and DeFi tokens enjoying an uptrend and offering buy the dip opportunities, too much activity is making the platform costly to use. Popular DEX Uniswap, which has long been the biggest gas guzzler, has spent $28.3 million in gas in the last 30 days.

“The high gas costs are a direct result of *huge demand for trading on Uniswap,” said Hayden Adams, the creator of Uniswap, earlier this month when the fees skyrocketed yet again.

“Scaling is a huge problem. It absolutely sucks small transactions are sometimes priced out during volatility.”

But it looks like it’s not only the smaller users that are feeling the brunt of the hefty fees; even the billionaires are complaining. This billionaire, is none other than crypto skeptic Mark Cuban.

Cuban mentioned that gas was always an issue when Haralabos Voulgaris, Head of Quantitative Research at Dallas Mavericks, suggested there being real value in sending money over a decentralized, permissionless network. Cuban feels,

“Except the gas is always an issue. Just the cost of moving crypto to AAVE is crazy expensive, and the number of non crypto options will increase.”

With the Shark Tank investor who finds more worth in bananas and compares crypto trading with the dotcom bubble,  name dropping popular DeFi project, AAVE got the CT excited AAVE 10.31% Aave / USD AAVEUSD $ 140.95
$14.5310.31%
Volume 509.28 m Change $14.53 Open $140.95 Circulating 12.2 m Market Cap 1.72 b
8 s Even Billionaires Complain About the High DeFi Uniswap Fees; Aave Users Get Excited 1 d A ‘Massive Transfer of Wealth Among Traders’ Sees DeFi Tokens Winning the Round 1 w Three Arrows Capital Holds 36,969 Bitcoin ($1.24B) via An Over 6% Stake in GBTC
.

“One of the most high-profile billionaires trying out DeFi. I am liking this trend,” noted one such DeFi investor.

However, just because Cuban publicly doesn’t find worth in crypto doesn’t mean he isn’t trying things out, as he responded,

“I don’t think people realize I try to test and use all this stuff and have for years. I still have crypto from the early days of coinbase. I’ve never sold anything.”

As for decentralized finance itself, Cuban says, “DeFi has incredible potential.” Still, according to him, much like derivatives, “risk never leaves the system” as it faces the risk of a dominoes-like collapse. Cuban said on the prospect of Defi fixing the problem of underbanked,

“It’s a long way off for the unbanked. Most deal with cash or lack compute power so they need intermediaries. That’s costly. As DeFi grows away from overcollaterization, it will be interesting to see if access expands or contracts.”

But here, the CT takes over and points out that while “the system is only as strong as its weakest link.” We do, in fact, need better insurance models; the missing point is “unlike tradFi, DeFi is a perfectly transparent system that allows you to measure risk in real time,” said Santiago R Santos, a partner at Parafi Capital.

The DeFi space has grown to over $20 billion in total value locked (TVL) as the DeFi project continues to grow and rise in value. This week, the top US banking regulator actually talked about the opportunities of DeFi and regulators needing to be ready for it.

Read Original/a>
Author: AnTy

This DeFi Blue Chip is Coming to Bitcoin with The RSK Market Proposal

“An Aave approach to the Bitcoin world” is what the DeFi Bluechip project is trying to achieve now.

The popular decentralized finance project announced this week that it is now coming to Bitcoin with a new proposal “for an RSK market on the Aave Protocol.”

“This is a huge step for expanding the DeFi ecosystem,” noted the team which launched Aave V2 last week, which saw its market size surpassing $35 million. The upgrade makes the project easier and cheaper to use, with its flash loan functionality also getting a revamp.

Following the launch of the latest version, the team proposed the ability to separately delegate proposal power and voting power —

“a major step in governance scalability as we believe the ability to assess proposals require different skills than those needed to make a smart contract proposal.”

Aave is the fourth largest DeFi project whose governance token AAVE continues to grow strong, trading at $76.28, with a whopping 4,147% year-to-date performance.

The project has $1.6 billion in TVL, with 432.5k ETH, 10k BTC, and 15.55 million DAI locked in it.

The proposal on Aave’s governance forum explains that for leveraging Bitcoin, they will be incorporating the RSK Market. This will be completely done by RSK devs, and integration has already been done with Chainlink, which will be used by Aave.

RSK’s full technology stack is built on top of Bitcoin, and its goal is to add value and functionality to the ecosystem of the largest cryptocurrency by enabling smart-contracts, near-instant payments, and higher-scalability.

Instead of a bridge, Aave proposes creating a Market, a new idea that incorporates new customers that are not using Aave. All new tokens already on RSK Marketplace natively will be brought along with the new proposal to increase the liquidity and opportunities for both companies. The team noted,

“We will bring to the table new customers that will bring new business and liquidity from the bitcoin world that look the DeFi platforms differently.”

Read Original/a>
Author: AnTy

DeFi Leader, Aave, Rolls Out V2; Adding ‘Collateral Swaps’ to Reduce Loan Liquidations

Aave, a decentralized lending platform, launches Version 2 (Aave v2), bringing along a slew of new features to build more efficient decentralized lending solutions. While the added features all bring better efficiency to the platform, the new collateral swap feature is the poster boy for the Aave v2 launch on Thursday.

Furthermore, the launch coincides with the recent rise in Aave flash loans – reaching $1 billion – and rise to the fourth spot in rankings of the largest DeFi projects in total value locked (TVL) – recording $1.5 billion in TVL (10% of the total DeFi market cap).

The collateral swap feature

As mentioned, the new collateral swap is the most exciting feature in the new upgraded version. If a user wants to borrow across the DeFi ecosystem, users place their crypto as collateral, locking them up until they are repaid. For example, a user can put ETH as collateral against Maker’s DAI stablecoin to use it. However, they wish. However, this forces the user into a long position on ETH since they are locked for a set period.

If the price of ETH tanks, the user will be readily liquidated, as witnessed during the March mega-crash. The new collateral swap feature allows the borrower to swap their collateral for another token efficiently while using low gas costs. In the case that if the ETH price is collapsing, users can switch it for wBTC, AAVE, LINK, or even a stablecoin to protect them from volatile crypto price movements and potentially liquidations. Stani Kulechov, Founder of Aave, wrote in a blog post,

“In DeFi, assets that were being used as collateral were tied up, but now with V2, they are free to be traded,”

“Users can trade their deposited assets, across all currencies supported in the Aave Protocol, even when they are being used as collateral.”

The collateral swap on Aave v2 is supported by a new flash loan, a new feature on the upgrade, allowing users to open and close a loan within one block. The new feature aims to quicken the process and reduce the fees when repaying loans giving users a seamless experience.

“This new feature allows users to close their loan positions by paying directly with their collateral in just 1 transaction — smooth and simple.”

Native credit delegation introduced

Aave v2 encompasses a host of features, including credit delegation aiming to revolutionize the decentralized lending industry. According to Stani’s post, the credit delegation feature will “open up access to liquidity without [the user] needing existing capital.” Introduced back in July, the CD feature remained a hugely centralized feature on version 1, managed by the Aave development team.

The upgrade introduces a more decentralized power to users who wish to delegate their collateral to another account. In a statement to Coindesk, Kulechov called on developers to build systems atop the Aave v2 and solutions to boost credit delegation across the platform.

Other features added on Aave v2 include batch flash loans, flash liquidations, gas optimization, and stable & variable rate borrowing, allowing users to switch conditions on their loans at any given time, switching from regular and irregular rates.

The Aave community also recently passed the AIP-3 proposal that makes a move from v1 to v2 seamless. The statement reads,

“By using a Flash Loan powered migration tool, users will be able to make the transition without having to close their V1 loan positions.”

The migration will be launched later in the month.

Read Original/a>
Author: Lujan Odera

Aave Takes an ‘Important’ Step Towards Decentralization with the Handover of Governance Keys

In what marks a historic moment, decentralized finance (DeFi) project Aave has officially handed over the protocol admin keys to the governance, which it calls “an important step towards decentralisation.”

Initially launched on Ethereum, LEND token holders were the ones with the governance. Now, about a month away, LEND holders voted for the first Aave Improvement Proposal (AIP) to migrate to the AAVE token at a rate of 100:1, “effectively jumpstarting the Aavenomics.”

The governance tokens were first distributed in a nearly $18 million token sale in November 2017.

Currently, LEND’s migration is going on with the AAVE token now the new governance token of the protocol.

With a total token supply of 16 million AAVE, 13 million will be redeemed by LEND token holders, and 3 million will be allocated to the Aave Ecosystem Reserve.

Besides voting on AIPs, Aave holders can stake their tokens in the Safety Module and earn Safety Incentives in exchange for securing the protocol.

Aave protocol facilitates the issuance of “flash loans,” which has been described as the “first uncollateralized loan option in DeFi.”

Currently, the project is the 5th biggest DeFi protocol by the Total value locked (TVL) of $975 million, down from $1.7 billion on August 31st, as per DeFi Pulse.

Read Original/a>
Author: AnTy