- Aave V3 offers users new risk mitigation features like High-Efficiency Mode, which allows investors to increase their capital efficiency when staking or borrowing.
- The latest upgrade reduces gas costs across all functions by 20-25%.
- Aave calls V3 the “most significant upgrade to the Aave protocol” since its inception in January 2017.
- Aave V3 was first deployed on Ethereum Layer-2 networks like Optimism, Polygon, Arbitrum, and Layer-1 blockchain Avalanche.
- Aave’s governance token AAVE remained flat after V3 was deployed. It’s currently trading at $88.12.
Decentralized finance (DeFi) lending and borrowing platform Aave (AAVE) has deployed the third version of the protocol on the Ethereum mainnet.
The Aave DAO voted unanimously in favor of the proposal to deploy Aave V3 on Ethereum.
Aave V3 introduces new risk mitigation features, improved capital efficiency, and decentralized liquidity. In particular, High-Efficiency Mode allows users to increase their capital efficiency when staking or borrowing.
Aave Protocol V3 is now live on the Ethereum market
”The most exciting aspect of V3 is its flexible design, which enables a variety of new risk mitigation features, and its improved capital efficiency & decentralized liquidity – all while reducing gas costs.” @StaniKulechov pic.twitter.com/QsSnnlhEMr
— Aave (@AaveAave) January 27, 2023
Isolation Mode allows for more assets to be listed on Aave as collateral while keeping the security of the protocol. The upgrade also focuses on gas optimization and reduces gas costs across all functions by 20-25%.
Aave calls the latest upgrade the “most significant upgrade to the Aave protocol” since its launch in January 2017.
Aave V3 has already been deployed on Ethereum Layer-2 networks like Optimism, Polygon, and Arbitrum, as well as Layer-1 blockchain Avalanche.
AAVE Stays Flat
Aave’s governance token AAVE remained little changed after the news broke. It’s currently trading at $88.12, according to data from CoinGecko.
AAVE has pumped by around 50% since the start of the year. However, most tokens have seen 50-100% increases in 2023, mainly because of the belief that the bear market bottom is in and the U.S. Federal Reserve will soon cut interest rates.
But AAVE is still trading 87% lower than its all-time high of $661.69.
Aave is the fourth-largest DeFi platform, with $4.54 billion in total value locked (TVL), according to data from DefiLlama.
On the Flipside
- Activity on DeFi platforms has remained low since the start of the bear market last year.
Why You Should Care
Aave is one of the market’s oldest and largest decentralized lending and borrowing protocols. It’s encouraging to see that the protocol is still pushing fresh upgrades. Investors might consider looking at potential investment strategies on Aave.
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