Aave has become a leading platform and token in the DeFi sector. Now the protocol is changing to version 2 and the native token AAVE (formerly LEND) reached a new all-time high.
With currently almost 2 billion US dollars of capital tied up in crypto, AAVE is one of the heavyweights in the DeFi (Decentralized Finances) division. The native token AAVE has established itself in the TOP 30 of the largest crypto currencies. Now the project is taking a big step forward and has released version 2 of Aave protocol. This makes it even easier for users to borrow and lend various crypto currencies. The launch of Aave Protocol V2 yesterday, Thursday, sent the token skyrocketing, and AAVE is now quoted at over 90 US dollars, which is on the level of all-time highs.
Background to Aave
Aave was formerly known as LEND and aims to combine different approaches to DeFi credit transactions in a user-friendly way on one platform. Currently, about 20 different crypto currencies are supported by Aave protocol. In addition to Stablecoins such as USD Coin (USDC), Chainlink (LINK), Wrapped Bitcoin (WBTC), Ethereum (ETH) and DAI are currently in high demand. A list of the crypto-currencies served by Aave and expected interest rates can be found here, you can switch between version 1 and version 2 at the top left of the webpage.
Aave offers borrowers different options: Fixed or market-adjusted interest rates, as well as Flash Loans. These are a type of flash loans that must be redeemed immediately. This area plays a particularly important role for Aave, with a recent volume of one billion US dollars, as Aave proudly reports in a blog post on version 2.
One of the important new features of Aave V2 is a tool called “Gas Optimization”, which helps to save money on Ethereum’s block chain. Another new feature is the ability to open positions in Flash Loans in several crypto currencies at the same time. More importantly, loans can also be opened in different crypto currencies to avoid liquidation. Aave now also introduces a one-click function that drastically simplifies the otherwise time-consuming and costly process. The further development of Credit Delegation, a feature that allows major clients to offer credit transactions with no or less collateral than otherwise required by Aave, is aimed at institutional clients.
Aave also collects fees for each deal, with nearly $1 million in Flash Loans alone since the beginning of the year, which are now being distributed to AAVE’s holders. This is probably the reason for the new record of AAVE, besides the technical development of the protocol.
Conclusion: Aave strengthens its position as a center for DeFi
The success story of Aave has several reasons:
- The Smart Contracts used to organize credit transactions at Aave have so far been without any flaws. Not all DeFi projects can claim this. For the Smart Contracts in Aave V2, we also refer to several previous security audits carried out by specialized external companies.
- In addition to credit transactions, Aave has also integrated important functions such as the exchange of crypto-currencies and staking in its platform. Thus, all the important tools for DeFi are united under one roof.
- Aave is the market leader in the field of Flash Loans and has made an innovative financial product strong.
With such arguments, Aave attracts strongly growing volumes, which in turn guarantees attractive conditions for all parties involved. The native token AAVE benefits from these positive developments and makes it easy for you to participate in these successes. And if you become active in the field of DeFi yourself, whether as a lender or a borrower, version 2 of the Aave protocol will make it even easier to use and more flexible with a wider range of possibilities.