Top Defi protocol Aave just rolled out its 2.0 version which is the biggest update yet and the token increased by 8% moments after the rollout. In today’s altcoin news, we are reading more about the price analysis.
The top Defi protocol Aave rolled out its biggest update yet after many hypes and now everyone expects it to start boosting the growth of the protocol. Using Aave, Ethereum DeFi users can lend and borrow top crypto assets like ETH and stabelcoins. Currently, the protocol has a total locked value of $1.5 billion which makes it the fourth-biggest Defi protocol according to DefiPulse. Aave 2.0 now aims to solve some major pressure points of the users of the first iteration that the project had.
https://twitter.com/StaniKulechov/status/1334517272761815044
According to the founder Stani Kulechov, Aave v.2 allows the users to swap their collateral in a gas-efficient manner so when using the protocol, one pain point was the extremely high transaction fees as they priced out smaller users. According to the documents, collateral swapping will help users avoid liquidations:
“Collateral swapping can be a useful tool to avoid liquidations. If the price of your collateral starts to fall, for example, you can simply trade it for a stablecoin so you don’t have to worry about price fluctuations and potential liquidation.”
Another key use case of the upgrade is the ability to delegate the credit lines in order to address other sub-addresses you could own. This means that you can deposit $1,000 into the protocol and delegate the credit to another address to led the owner of the address to use it as collateral. One key issue that Aave has to overcome, is the vast amount of overcollateralized loans in the space. Due to the uncensorable nature of the crypto assets, ETH included, it’s not clear if this issue will be solved soon.
Aave surged on the news, increasing by 8% from $84 to $91. The analysts now await for the coin to move higher in the upcoming weeks if BTC continues to press higher and if Defi gains more traction. Another top DeFi protocol now working on a V2 is Yearn Finance. Yearn’s developers are now working on version two of the Vault system which will allow users to deposit crypto assets and easily earn a regular return. The new version will use multiple yield farming strategies with one deposit to maximize the yields and to possibly reduce the attack surface.
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