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Assessing the impact on Aave following Curve founder’s deposits
Given the mechanism of the Aave V2, the recent CRV concentration has impacted the protocol’s revenue.
- Aave fees jumped as high as $2.64 million.
- Curve’s founder Michael Egorov reduced his debt while Aave’s TVL fell.
Decentralized Finance (DeFi) protocol Aave [AAVE] recorded an incredible hike in fees on 3 August, digital asset research platform ASXN revealed. Usually, the Aave protocol makes money in fees when users access large uncollateralized loans which are returned with interest.
Realistic or not, here’s AAVE’s market cap in CRV’s terms
According to ASXN, Aave fees on 3 August increased by 412.6% compared with the one generated on 2 August.
.@AaveAave V2 has earned the highest fees over the past day, at $2.64M.
This is 412.6% higher compared to the previous day. pic.twitter.com/9Azs42evkU
— ASXN (@asxn_r) August 3, 2023
Credit to CRV’s input
One reason why Aave has been able to make this much is because of the Curve Finance [CRV] recent troubles and its founder’s resolve to keep the protocol safer than before. To mitigate liquidation risks, Curve’s founder Michael Egorov began borrowing stablecoins on Aave.
However, in a new series of Over-The-Counter (OTC) transactions, Egorov had sold a total of 110 million CRV. Based on Dune Analytics’ dashboard, the founder has received $22.8 million in Tether [USDT] to repay the debts.
At press time, Lookonchain reported that Egorove had $220.4 million in collateral and $79 million in debt.
Update:
The #Curvefi founder(Michale Egorov) sold a total of 72M $CRV to 15 institutions/investors via OTC at a price of $0.4 and received $28.8M to repay the debts.
He currently has 374.18M $CRV ($220.4M) in collateral and $79M in debt on 5 platforms. pic.twitter.com/taSExmR7Kq
— Lookonchain (@lookonchain) August 3, 2023
While the Aave protocol may have gained from Curve, its governance token did not experience the same fate. In fact, it was the other way around. Based on CoinMarketCap’s data, AAVE’s seven-day performance was a 13.33% decrease triggered by the exploits on the Curve pool.
No “GHO” area as TVL and volume shrink
Within the same period, its stablecoin GHO has been oscillating between losing its peg to the dollar and regaining it. Interestingly, this was happening at a time when Aave announced that 10 million GHO had been minted.
In terms of its Total Value Locked (TVL), DefiLlama showed that Aave has fallen below the $5 billion mark. This was a result of the 15.16% decrease in the last 30 days.
The TVL measures the total value of unique deposits into a protocol. When the TVL increases, it means the distributed Application (dApp) has become more trustworthy. But when the metric decreases, it implies that a protocol isn’t perceived to be healthy.
How much are 1,10,100 AAVEs worth today?
Meanwhile, Aave’s 24-hour volume has been encouraging. According to DefiLlama, the volume was down to $87.29 million— a 29.53% decline in the last 24 hours.
Source: DefILlama
Typically, a greater volume leads to fair prices. However, AAVE’s volume decrease signifies inefficient trades as the asking price of sellers has failed to meet the potential bid of buyers.
