Ethereum’s Aave token gained 5% in the past 24 hours and the performance came as the prices of both ETH and BTC stagnated as we are reading more in today’s altcoin news.
LEND’s outperformance seems to come out from a crucial technical change to the Aave protocol and the cryptocurrency as well. This technical change should bring more intrinsic value to LEND which should in turn boost the prices higher. The DeFi coin is down due to the marketwide correction which started this month. Ethereum’s Aave token increased by 5% in the past 24hours and traded at $0.55, a few percent below its all-time high that was set in August.
Announced a week ago, LEND is getting transformed into a new cryptocurrency named AAVE. AAVE is the governance token of the Aave protocol that will allow the users to dictate the direction in which Defi apps go. AAVE has more intrinsic value than LEND because it can be used as a voting mechanism and it can be staked which allows DeFi users to earn rewards in time. As the Aave Improvement Proposal outlined:
“This AIP, if accepted by the community, will slowly deprecate the LEND asset in favor of the AAVE asset. As stated in the Aavenomics, this token upgrade will also create the Ecosystem Reserve (ER), the Safety Module (SM), and start the Safety Incentive (SI) rewards distribution. The Safety Module is designed as an additional line of defense for Aave liquidity providers and as a way for AAVE holders to “stake” their assets in exchange for a range of rewards.”
For further instructions: https://t.co/H555f6d6v6
— Aave (@AaveAave) October 2, 2020
Adding to the strength in the value of the coin, top venture capitalists in the space have pledged their support for Aave. Spencer Noon the head of DTC Capital commented that Aave’s protocol has about $2 billion in assets and contracts:
“One of the best signals of PMF in #DeFi is if a project can succeed w/o extra incentives (liquidity mining). @AaveAave doesn’t have LM yet it’s still one of the biggest beneficiaries of new yield farming activity. At $1.26B TVL and only $759M mcap—the fundamentals are so strong.”
As recently reported, Aave released $500 million in DeFi flash loans which is a novel invention that allows users to take micro-term loans for the whale-sized transactions.
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