Hi HODLers, Hiveans and Lions,
Looking at my long-term portfolio where I Dollar Cost Average (DCA) daily. I noticed that my $AAVE tokens were pumping more than 25%!
Therefore, this morning I decided to do a quick research to know why?
According to the on-chain analytics platform, Lookonchain, the AAVE surge can be pinned to the actions of a whale accumulating the token. Trackers show that an unknown whale, “0x5a80,” has accumulated 182,152 AAVE worth $13.2 million from multiple exchanges in the early hours on June 25.
In early June, for example, the Aave community floated a proposal to deploy GHO, the Aave protocol stablecoin, on the mainnet. Widely supported by the Aave community, **if approved through a majority voting from AAVE holders, the GHO stablecoin will launch with a borrowing cap of $100 million. **
Proposal can be found here
If done, this will allow Aave V3 tobe free to mint the stablecoin using their ethereum (ETH) deposits as collateral.
Therefore increasing revenues for the Aave DAO as they will collect all interest payments from borrowed GHO.
Aave V3 TVL
This might also be the main reason as it grew substancially over the past weeks. This is generating new fees and therefore increase the value of the underlying token.
The Aave v3 upgrade will focus on mitigating user risk and improving capital efficiency (High Efficiency Mode) when staking or borrowing correlated assets like stablecoins and liquid staking derivates (LSDs). Liquid staking derivatives are derivative contracts that allow users to retain liquidity of an asset while staking it for a reward.
High Efficiency Mode, also called eMode, allows users to capitalize on the highest borrowing power out of their collateral for correlated assets. Users can now leverage larger amounts of assets like wstETH (wrapped staked ether) and stake it on the Ethereum blockchain for rewards.
Aave v3 will also reduce $ETH fees by 20-25%!
Aave V1 TVL
As we can see below the V1 TVL did not see the same increase as the V3
For those who don't know what Aave is
And you? Would you invest in $AAVE token or would you prefer other #DeFi Blue Chips?
Previous Articles