AAVE was once the biggest DeFi protocol on the planet. Beyond leading the Decentralized Finance market, it also led the lending market. However, gradually, the Dapp lost its status on both fronts. It’s here to be noted that AAVE can get back its glory by developing its ecosystem.
AAVE brings back Grants DAO
One of the biggest elements of AAVE’s growth has been the AAVE Grants DAO. Starting in May last year, the DAO ran for one quarter.
The community-led grants program focuses on building a solid ecosystem by funding ideas, projects, and events that benefit the AAVE ecosystem.
Now with the proposed third iteration, the DAO will be provisioning $6 million for AAVE for the next two quarters, providing $3 million every quarter.
To date, since May 2021, the DAO has funded 32 developer grants and events to ensure protocols are visible throughout the ecosystem and plans on doing the same on a much larger level this time around.
AAVE Grants’ funded projects | Source: Twitter
On the back of this announcement, AAVE did note fluctuations, at press time, it rose by 11%
This way DeFi coin remains open to the possibilities of a price recovery soon, given bearishness is finally receding after being in a squeeze release since 14 March.
AAVE price action | Source: TradingView – AMBCrypto
The price action will find some support from the growing utility of V3, particularly in the Polygon market. Loan volumes finally picked up pace this month and are currently averaging at $10 million – $12 million.
AAVE V3 loan volume | Source: Dune – AMBCrypto
Currently, most of the loan is taken out in USDT, USDC, DAI, and WMATIC, but over the week, asset distribution has noted GHST (Aavegotchi) as an emerging choice of token as well.
On the other hand, deposits on V3 have been rather low this month, with volume averaging between $1 million to $2 million. Given the uncertainty of the market, it makes sense for investors to hold onto their tokens since they might have to sell and cash out should the market crash again.
AAVE V3 deposit volumes | Source: Dune – AMBCrypto
