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Aave grows as V2 features trigger increased user interest

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Source: Pixabay

Decentralized Finance [DeFi] projects have been gaining momentum in the market alongside many other cryptocurrencies. Although Chainlink [LINK] has remained the largest DeFi project with $ 12.3 billion, Aave was following at third with a market cap of $6.1 billion, right after Uniswap.

The project has been gaining increased interest as it released the Aave v2 migration tool that made long collateral positions less risky than before. This second version aimed at making the project more flexible and more capital efficient has resulted in Aave hitting an all-time high of $520 on February 4. This was the time it briefly overtook the position of the second-largest DeFi token surpassing Uniswap’s UNI token.

The v2 has introduced a list of new features for the users’ benefit, and its new collateral swap functionality which worked on an improved flash-loan system has been widely used. With this new feature, clients using Aave to borrow against their crypto assets were effectively taking a long position. It allowed the borrower to choose their underlying collateral without leaving Aave and saving gas.

In a report on OurNetwork by Head of Marketing at Aave, Isa Kivlighan noted that ever since the launch of Aave v2, it has grown to $2 billion in assets. Meanwhile, Aave flash-loans hit a new record with $1.98 billion of volume.

Source: OurNetwork

This indicated that the improved system not only works but has been accepted by users. This increase in volume brought the total volume to $3.7 billion, as per data, and surpassed v1.

Owing to the new version, Aave occupied the second position among the DeFi platforms in terms of Total Value Locked [TVL] at $5.98 billion, as per data provided by DeFi Pulse, and at press time, was trading at $484.

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Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.