Launch of Aave V3 Prompts 50% Rally
Despite high gas fees, Aave Protocol, the top money market and liquidity protocol on Ethereum, has become a mainstay in the crypto space. More than a mainstay, it is currently the #1 DeFi protocol by TVL rankings with over ~$23 billion at press time. Launching on Avalanche and Polygon in late 2021 allowed Aave to compete with faster chains, allowing the OG protocol to shake off its competitors.
Aave V3, which went live last week, is likely part of the recent surge to the #1 spot. If you’re not familiar, Aave is mainly used for borrowing and lending. “Using their deposits as collateral, users can then borrow other assets to use in other DeFi protocols.” This allows users to leverage their crypto in an overcollateralized way, but you can still get liquidated if the your deposited assets start to tank in value.