One of the hottest crypto projects in decentralized finance (DeFi), Aave, is now ready to leave phase 1 by launching Aave V2 to “push the limits of what is possible,” with this sector.
There is already much excitement for the (formerly known as Eth.Lend) project, which was launched in January 2020 after a 2017 $16.2 million ICO, into the community as it integrates with other popular DeFi projects.
In the past couple of years, the protocol has grown to be of 1 billion market size with innovations like flash loans, credit delegation, and stable rates.
Recently, there have been reports that the project will be transferring the ownership of the project through its governance token AAVE.
In its latest announcement, the team shared governance features such as vote delegation and cold wallet voting that will be coming with V2.
“V2 will be the start of what is commonly referred to as “Liquidity Mining” for the users of the Aave Protocol,” it read.
The native token of the money protocol LEND took a jump on these upcoming developments, hitting a new all-time high of $0.499. This biggest gainer of 2020, with 5,400% returns, has recorded an increase of 13,500% in the past year.
Even more exciting response was reflected in the total value locked in the protocol, which doubled, going from $529.5 million yesterday to surpass $1 billion yesterday, as per DeFi Pulse.
The Aave protocol V2 will allow anyone to natively trade their debt position, which will open the possibility for interest rate optimization and yield optimization strategies.
To onboard a new set of users, this new version will allow users to repay with part of their collateral and introduce debt tokenization and native credit delegation.
Interestingly, the Aave protocol will open private markets to support tokenize assets of all kinds. “A collaboration between RealT and the Aave Protocol is in the works to push DeFi even further and bring mortgages on Ethereum.”
Fixed deposit rates are meanwhile chosen to provide a guarantee of income for liquidity providers, so that market volatility doesn’t affect them while improving the stable borrow rate.
With V2, Aave is also tackling the skyrocketing Ethereum gas prices. First, for gasless approvals, aTokens V2 integrates the EIP 2612. Besides introducing significant gas Optimisations that will be leading to a “sharp drop” in the transaction cost, they will implement native GasToken Support as well.