Home News DeFi Lender Aave Launches V3 on the Ethereum Network

James Carter

27 Jan 2023

DeFi Lender Aave Launches V3 on the Ethereum Network

Following the unanimous approval of a governance proposal, the decentralized lending and borrowing protocol Aave has launched its third version on the Ethereum network.

When staking or borrowing correlated assets like stablecoins and liquid staking derivates, the Aave V3 upgrade will concentrate on reducing user risk and enhancing capital efficiency (High-Efficiency Mode) (LSDs). Liquid staking derivatives are a type of derivative contract that enables customers to maintain the liquidity of an asset while simultaneously staking it for the purpose of earning a reward.

High-Efficiency Mode, which is also known as eMode, gives users the opportunity to make the most of the highest borrowing power possible from the correlated assets that they have as collateral. Users are now able to leverage more significant amounts of assets, such as wrapped staked Ethereum (wstETH), and stake it on the Ethereum blockchain in order to receive rewards.

In addition, the update has a strong emphasis on optimizing gas utilization, and Aave has stated that it will result in a 20–25% reduction in gas expenses across the board. On Ethereum, a transaction charge known as gas is used, and it is paid to validators.

According to DeFiLlama, the Aave protocol currently has a total value locked (TVL) of $4.56 billion. This represents a growth of 23.37 percent over the previous 30 days.

The price of the Aave token (AAVE) has remained the same, which may be used as collateral on the platform as of the previous day. It is currently trading at $86.73.

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