Aave DAO has introduced its multi-collateralized stablecoin, GHO, on the Arbitrum network. This move marks the first step in the DAO’s phased strategy for cross-chain expansion. Aave DAO Begins Cross-Chain Expansion With GHO on Arbitrum According to an announcement, Aave DAO has launched GHO on Arbitrum, utilizing the Chainlink Cross-Chain Interoperability Protocol (CCIP). Aave DAO […]
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Liquidation Alert As High-Risk Loans On Aave Reach $1 Billion – Details
According to a report by data analytics company IntoTheBlock, the volume of high-risk loans on the prominent Aave Protocol is reaching high levels as general loan volume in the DeFi space records multi-year highs. This development is believed to stem from investors exploring various investment strategies in a bid to maximize profits in a highly anticipated crypto bull run.
Aave’s High-Risk Loans 5% Short Of Liquidation Threshold
In its weekly newsletter on June 8, IntoTheBlock highlights that DeFi loans are currently estimated at billion representing the peak value seen in the last two years. As the largest lending protocol, Aave accounts for over 50% of these figures with its users having borrowed about billion.
Notably, billion of this debt is categorized as high-risk loans which are placed against volatile collateral. Currently, these loans present substantial risk, with the values of their collateral asset within 5% of their set liquidation threshold.
For context, the margin call level or liquidation threshold is a predetermined point at which an asset’s value falls to a level where the lender or broker requires the borrower to add more collateral to maintain the loan or position. Failure to meet this requirement may result in the automatic liquidation of such collateral.
When collateral assets hover around this critical threshold as with the high-risk loans on Aave, any minor dip may lead to widespread liquidations. This normally results in the loss of such assets for the borrower. However, in certain conditions where a rapid price decline occurs, the borrower may incur additional losses which may be transferred to their account balance on the lending platform.
Furthermore, liquidations from these high-risk loans may exacerbate market volatility, which may result in more price loss, leading to more liquidations in a downward spiral. In addition, many assets getting liquidated at once can create liquidity crunches which can prevent the Aave protocol from operating smoothly.
AAVE Price Overview
Meanwhile, AAVE has declined by 5.30% in the last day after facing serious resistance at the .20 price zone. The DeFi token is currently valued at .30 after an overall negative performance in the past week resulting in an 11.53% price loss.
However, according to price prediction site Coincodex, the general sentiment around AAVE remains positive. The team at Coincodex backs AAVE to make a remarkable comeback hitting a price point of 3.87 in the next one month.
Aave Network Set to Launch Following Aave V4 Protocol
In a recent social media post, Stani Kulechov, the founder of Aave, announced that the Aave Network is expected to launch following the completion of the Aave V4 protocol. This development is eagerly anticipated by the defi community, as the Aave Network is projected to become one of the largest Layer 2 networks on Ethereum, […]
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Aave Labs Unveils Ambitious Plans for Protocol V4: Enhancing GHO Stability and Cross-Chain Liquidity
Aave Labs proposed a significant upgrade to its protocol, aimed at enhancing features like its stablecoin GHO, introducing a Unified Liquidity Layer for better integration, and improving the protocol’s architecture for cross-chain liquidity across both Ethereum and non-EVM layer-1 platforms. The update also focuses on automatizing interest rates based on market conditions with Chainlink data […]
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Aave Proposal Aims to Safeguard Against DAI’s Rapid Market Cap Increase
The Aave Risk Framework Committee (ARFC) has proposed adjustments to the risk parameters of the dai (DAI) stablecoin to mitigate potential risks associated with Makerdao’s aggressive expansion of the DAI credit line. The proposal, initiated by the Aave Chan Initiative (ACI) team, suggests setting the loan-to-value (LTV) ratio for DAI to 0% across all Aave […]
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Gauntlet Withdraws From Aave Partnership, Citing Governance Challenges
Gauntlet has decided to withdraw from its role as Risk Steward for Aave, pointing to governance and operational challenges as the main reasons. This announcement marks the end of a four-year collaboration that has helped in growing Aave. Gauntlet Ends Partnership With Aave Due to DAO Disputes Gauntlet, a blockchain risk management firm, has officially […]
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Aave Joins Binance’s BNB Chain Ecosystem – Here’s How Users Benefit
In a significant development for the Binance Smart Chain (BSC) ecosystem, Aave (AAVE), one of the largest decentralized finance (DeFi) market protocols, has announced its integration with BNB Smart Chain. Aave joins prominent projects such as Uniswap, Ambit Finance, PancakeSwap, and Lista DAO.
BNB Chain Welcomes Aave
According to the announcement, this latest development opens up new opportunities for BNB Chain users, giving them access to what the protocol calls “top-tier lending platforms” and enhanced liquidity.
With the launch of First Digital USD (FDUSD), users can now leverage “robust” liquidity, allowing them to explore different applications and opportunities in the Binance ecosystem.
On the other hand, Aave users can now benefit from BNB Chain’s fees and the ability to integrate with one of the largest DeFi ecosystems, fostering increased collaboration between the two communities. The announcement also noted the following about the Aave integration:
This not only complements but strategically aligns with BNB Chain’s 2024 outlook. Focused on mass adoption, high-frequency DeFi applications, and network efficiency improvements, the ecosystem is set for an exciting evolution.
2024 Goals
Looking ahead, BNB Chain has set numerous goals for 2024. The introduction of opBNB – the Layer 2 (L2) scaling solution for the BNB Smart Chain – aims to achieve a transaction processing capacity of 10,000 transactions per second (TPS) by doubling the gas limit to 200 M/s.
Enhanced security measures accompany this increase in capacity through multi-proof mechanisms. In addition, implementing Ethereum’s EIP4844 and Greenfield’s data availability upgrades will reduce gas fees by 5-10 times, providing users with a more cost-effective experience.
In a move called “BNB Chain Fusion,” the BNB Beacon Chain will be merged with the BSC, further enhancing the efficiency and security of the network. The expansion of the number of validators, which will increase from 40 to 100 by 2024, is also expected to contribute to the stability of the network.
Market Cap And Token Holders On The Rise
According to Token Terminal data, the BNB chain has experienced significant growth, evidenced by several key metrics.
One notable metric is the fully diluted market cap, which stands at .71 billion, representing a significant increase of 23.9% over the past 30 days, highlighting the confidence in the protocol.
The circulating market cap, another crucial indicator, currently sits at .73 billion, showing a solid 11.6% growth over the same 30-day period.
On the other hand, the number of BNB token holders has shown a positive trend, reaching 113.51 million, with a significant increase of 3.5% in the last 30 days, demonstrating interest in the ecosystem.
Featured image from Shutterstock, chart from TradingView.com
Decentralized Money Market Protocol Aave Joins BNB Chain’s Defi Landscape
On Feb. 22, 2024, the primary development group of the BNB Chain revealed that the decentralized finance (defi) money market protocol, Aave, has been successfully launched on the BNB network. Boasting a total value locked (TVL) of .571 billion, Aave is now active across 13 blockchains in total. Aave Goes Live on BNB Chain The […]
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Aave V3 Ready For Solana After This Crucial Vote Passed
The Aave community has overwhelmingly approved a proposal that will set the ball rolling for deploying Aave V3 on Solana, a smart contracts platform. The motion, put forward by the Neon Foundation and the Aave Chan Initiative (ACI), passed with a majority vote of 83% based on results posted on January 21.
Solana Fast Rising, DeFi Ecosystem Active
Solana has been rapidly expanding, with its native currency, SOL, emerging as one of the top performers in 2023. To put it in perspective, SOL prices exploded from about in 2023 to around 5 by the end of the year.
This surge saw SOL reverse losses of November 2022 while concurrently catalyzing events on the blockchain, spurring various activities, including the expansion of decentralized finance (DeFi), non-fungible token (NFT), and meme coin activities.
Related Reading: Bitcoin Price Turns Red, Why BTC Could Tumble Below K
On the other hand, Aave has been expanding to multiple Ethereum Virtual Machine (EVM) compatible networks, emerging as one of the leading decentralized finance (DeFi) protocols. According to on-chain data from DeFiLlama on January 22, Aave manages over .9 billion worth of assets across ten chains. A big chunk, over 90%, comprises assets on Ethereum. Aave v3 has a total value locked (TVL) of .9 billion.
Aave V3 On Solana, What It Means
The TEMP CHECK proposers are keen on Aave v3 deploying on Solana, considering the blockchain’s rapid growth in the past year. They observe that the blockchain’s DeFi TVL and broad user base would likely benefit the lending and borrowing protocol, cementing its position as a market leader.
If Aave is deployed on Solana, the protocol will access the deep liquidity on the blockchain. At the same time, users will access Aave services more conveniently. Subsequently, the proposers reiterated this move will cement Aave’s position as the leading liquidity market on-chain. Moreover, it will likely open up new opportunities for collaboration between the Aave, Solana, and other Neon EVM communities.
Neon EVM is a cross-chain bridge for users to transfer assets between Ethereum and other blockchains. Through this bridge, Aave v3 will go live on Solana without any major reconfiguration of the protocol’s codebase. Among the tokens that will be initially supported is SOL. Users will be free to borrow USDC, a stablecoin.
The passing of the TEMP CHECK also reflects Aave’s ambition to expand across multiple blockchains beyond EVM networks. So far, Aave has been deployed on various platforms, including layer-2s like Arbitrum and Base, Avalanche, and Ethereum’s sidechain, Polygon.
Whales Accumulating Maker And Aave, Path To 2024 Highs?
On-chain data suggests that whales are accumulating large amounts of Maker (MKR) and Aave (AAVE), two leading decentralized finance (DeFi) tokens. This accumulation trend coincides with a broader cooling-off period in the crypto scene days after the United States Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs.
Whales Accumulate MKR And AAVE
According to ScopeScan data, Anchorage Digital, a digital asset custody firm, purchased a significant amount of MKR on January 15. The firm acquired 12,103 MKR tokens, valued at approximately .7 million, from Coinbase, a leading crypto exchange in the United States.
Two whales, “0xbb5f” and “0x4a7,” also accumulated large quantities of MKR and AAVE. Specifically, “0xbb5f” bought 50,000 AAVE and 2,452 MKR worth around .03 million and .95 million from Binance, a leading cryptocurrency exchange. Meanwhile, 0x4a7 purchased 39,000 AAVE and 2,350 MKR, valued at approximately .95 million and .75 million, also from Binance.
These whale purchases signal a strong belief in the long-term potential of MKR and AAVE. Maker and Aave are two of the world’s leading decentralized lending and borrowing protocols across DeFi. MKR serves as the governance token for MakerDAO, which also manages the DAI decentralized stablecoin. On the other hand, AAVE is the governance token of Aave, a top decentralized lending platform.
According to the latest DeFiLlama data, Maker and Aave have total value locked (TVL) of over .4 billion and .3 billion, respectively.
Notably, whales are accumulating MKR and AAVE when the DeFi scene is recovering following the sharp contraction from 2022. The industry manages over billion, with Ethereum hosting more liquid DeFi protocols, including Lido DAO when writing in mid-January 2024.
Will Maker and Aave Rally To New 2024 Highs On Recovering DeFi?
Last year, MKR and AAVE were among the top-performing DeFi tokens, with MKR rising by over 200% and AAVE appreciating by more than 150%. Protocol-specific fundamentals, including the launch of Spark in Maker, partly drove this strong performance.
Aave launched the GHO stablecoin and the Lens protocol on the Ethereum sidechain, Polygon. Moreover, expectations of the spot Bitcoin ETF forced aggressive traders to consider top DeFi protocols, lifting altcoins.
As whales accumulate, there is more headroom for these tokens to grow. Presently, AAVE and MKR are lower, based on their respective performance in the daily chart. However, overly, the uptrend remains. To illustrate, MKR is within a bullish breakout formation with a critical support level of around ,560. Any surge past ,300 might ignite demand, lifting the token to new 2024 highs.