Aave v3 Of Crypto Lending Protocol To Launch On Ethereum

Jan. 26, 2023
Aave v3 Of Crypto Lending Protocol To Launch On Ethereum

The decentralized lending platform Aave has received approval from its DAO to release its newest protocol version, Aave v3, on the Ethereum blockchain. The launch was given the green light through a successful vote by the Aave DAO.

However, it will offer compatibility with seven different assets. Including wrapped bitcoin, wrapped ether, wrapped staked ether, USDC, DAI, link, and the platform’s own native cryptocurrency.

These assets were proposed by the DeFi risk manager, Chaos Labs, who were successful in their risk-off approach for the initial deployment of Aave v3 on Ethereum earlier in January.

Therefore, pricing for the assets will come directly from a Chainlink feed. Additionally, with the exception of wrapped bitcoin and wrapped staked ether, which will rely on price adapter smart contracts.

Using Chainlink and price adaptor smart contracts verifies the safety and validity of the pricing information. Users may now experience loans more smoothly.

Features Of  Aave v3

One of the most notable features of Aave v3 is its eMode feature. Moreover, which allows for maximum capital efficiency for collateral and borrowed assets with high price correlation.

Aave v3’s initial launch on Ethereum will include eMode support for ether-related assets, such as wrapped ether and wrapped staked ether. This feature allows users to boost the value of their collateral and have more flexibility in their lending activities.

Furthermore, the launch of Aave v3 on Ethereum also expands the DeFi protocol’s multi-chain approach. Aave v3 has already been launched on six other chains, including Avalanche, Optimism, Polygon, Fantom, Harmony, and Arbitrum.

However, this move shows the platform’s intention to deploy its protocol on multiple networks. In addition,  giving users more options and increases the overall usage of the platform.

Aave v2 on Ethereum is currently the largest DeFi lender by total volume locked. The protocol controls over $3.5 billion worth of assets, according to DeFiLlama. With the launch of Aave v3, the protocol will survive with its predecessor.

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Migrating to Aave v3 is made possible as it is a fresh deployment, not a removal, allowing users to transfer their positions from v2. A tool to ease the process is currently in development by the platform’s developer BGD Labs.

Aave v3 launch on Ethereum is a major advancement for the decentralized lending platform, offering new features like eMode and multi-chain support for increased user options and adoption.

Aave v3 aims to enhance user experience with accurate pricing data from Chainlink and price adapter smart contracts and added flexibility through the ability to migrate positions from v2 to v3. This upgrade is poised to elevate the DeFi lending market.

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.