The DeFi ecosystem continues to develop on Ethereum. Aave is among the most impressive growth protocols since the start of 2020. The latter has just exceeded $ 100 million.
Aave, a decentralized lending protocol on Ethereum
Aave is a decentralized loan and savings protocol launched in January 2020. Thus, two types of users are linked:
- Savers, deposit funds to generate interest on them.
- Borrowers, borrow funds against interest.
In addition to over-collateralization loans, which we also find at MakerDAO and Compound, Aave introduces the flash loan.
A flash loan is a loan whose lifetime is limited to a transaction. Thus, a user can borrow funds, use them and repay them in a single transaction on Ethereum.
Aave exceeds 100 million
At the end of last week, the protocol passed an historic milestone with the crossing of the 100 million dollars involved in the protocol.
This places Aave in fourth place in the DeFi protocols in terms of blocked funds, behind Maker, Synthetix and Compound. A situation that delights Stani Kulechov, CEO of Aave:
"The fact that the market has grown to $ 100 million a few months after launch confirms that decentralized finance is becoming more popular and easier to interact with. ", Stani Kulechov.
The innovation award
The growth of the protocol is not trivial. Indeed, Aave is only reaping the glory of its innovation.
Since its launch, Aave has tried to stand out from its competitors by offering unique and innovative features.
At the end of May, Aave announced the addition of Uniswap Liquidity Tokens as collateral on a loan. Simply put, when a user deposits funds into Uniswap liquidity pools, they receive Uniswap tokens. These tokens are now usable for making a loan.
This method is innovative because it allows you to take out a loan while remaining exposed to the costs generated by Uniswap.
This growth could well continue in the weeks or months to come, notably with the probable addition of the Protocol Governance Token (LEND) on Coinbase.
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