The Aave protocol is going to launch its third version on the Ethereum network after the DAO vote, which will create more opportunities in the DeFi industry.
Decentralized finance, or DeFi, has been one of the hottest sensations in the cryptocurrency world in recent years and has gained the attention of market leaders since its advent. Among the many projects leading the charge in DeFi, Aave is the emerging decentralized lending platform that is bringing waves in the industry with its innovative approach to lending and borrowing. Recently, the Aave protocol announced that the crypto lending platform had gathered successful votes to deploy its third version on the Ethereum blockchain.
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Aave V3 Takes The DeFi By Storm
The world of cryptocurrency just got a lot more exciting with the launch of Aave Protocol’s third version on the Ethereum blockchain, with a revolutionary lending interface that is set to change the game for crypto borrowers and lenders alike. Decentralized non-custodial lending and borrowing protocol Aave previously made a voting proposal to deploy its third iteration, or v3, on the Ethereum blockchain, a critical moment for the decentralized finance (DeFi) community as it aims to benefit from v3’s enhancement on risk management and capital efficiency.
After successful voting ended on 25 January, the platform is preparing to launch its v3 by tomorrow, which will support these seven assets: wrapped Bitcoin, wrapped ether, wrapped staked ether, USDC, DAI, LINK, and Aave. DeFi risk manager Chaos Labs made a significant move in the decentralized finance space by proposing new assets for Aave v3 on Ethereum. Moreover, the Aave DAO has given its stamp of approval in favor of Chaos Labs’ risk-off approach for the initial deployment of Aave v3. This is a huge development in the DeFi ecosystem, and it’s set to shake things up in a big way. With these new assets, Aave v3 is set to push the boundaries of what’s possible in the decentralized finance space and drive greater adoption and usage of the platform. It’s an exciting time for DeFi, and Aave is leading the charge.
Aave Pioneers The Future Of DeFi
With the launch of Aave V3, the crypto lending platform seeks to open multiple doors for the crypto community. One of the key additions in the Aave v3 is reliable pricing on assets, as the Aave developer BGD Labs has announced that all assets, except for wrapped Bitcoin and wrapped staked ether, will now display price directly from a Chainlink feed. As Aave harnesses the power of Chainlink’s oracle protocol, it aims to provide smart contract protocols with the most accurate data possible. However, Aave brings cutting-edge precision in pricing feeds of the wrapped staked ether and wrapped bitcoin through adapter smart contracts, which are also based on Chainlink feeds.
Additionally, Aave brings maximum efficiency to the Ethereum network as the latest version (v3) will come with a powerful new feature known as eMode, which optimizes capital usage for collateral and borrowed assets that have a high price correlation. However, during the initial launch, eMode will only support ether-correlated assets, meaning that Aave v3 on Ethereum will only support wrapped ether and wrapped staked ether.
Aave v3 brings more flexibility to the DeFi chain as the newest iteration of Aave is expanding the project’s multi-chain approach, making it available on more networks than ever before. Aave V3 has already been launched previously on six chains: Avalanche, Optimism, Polygon, Fantom, Harmony, and Arbitrum. Adding the Ethereum network will open more options for lending, borrowing, and earning interest.
Aave v2 on Ethereum is the reigning champion of DeFi lending with the highest TVL. According to DeFiLama, Aave protocol manages over $3.5 billion worth of assets. Moreover, the team clarified that Aave v3 would exist alongside Aave v2, meaning that users will have the option to choose between the two versions based on their needs.
Overall, Aave V3’s new features and improvements are expected to drive greater adoption and usage of the platform and push the boundaries of what’s possible in the DeFi space. With these new developments, Aave is poised to continue its growth as a leading player in the rapidly expanding decentralized finance industry.
