Aave – the third-largest lending protocol – has showcased a suite of new protocol upgrades falling under the umbrella of its V2 upgrade.
1/ Today we are excited to introduce the Aave Protocol v2, the new Money Market Protocol ready to push DeFi even further ! ??????https://t.co/yUHE1ShA2g
— Aave (@AaveAave) August 14, 2020
Less than a month after the debut of Aavenomics, Aave is doubling down on its expansion by adding new use-cases for users to better experiment with permissionless lending. As the protocol nears $1B in TVL, Aave’s V2 upgrade is set to add a suite of new features including:
- Collateral Repayment – Repay debt using existing collateral in one transaction
- Open Credit Delegation – Open an unsecured credit line with a trusted party. Previously only for large institutions
- Fixed Deposits – Secure a fixed lending rate when supply collateral
- Stable Borrow Improvements – Choose from different time intervals for fixed borrows
These features also come in tandem with future opportunities and optimizations of the protocol including:
- Private Markets – Tokenized real-estate loans with RealT
- aToken Upgrades – EIP 2612 for gasless approvals to reduce transaction costs
- Gas Reductions – Upwards of 50%+ reductions in gas costs on borrows, redemptions, and flash loans plus GasToken support
Here’s a look at how gas stacked up before and after the improvements.
Aave Trading Upgrades
Aave V2 also features a ton of trading upgrades such as:
- Debt Trading – Trade debt positions from one asset to another for interest rate optimization
- Collateral Trading – Trade collateral between accounts
- Margin Borrowing – Go long or short on any asset supported by the protocol
Governance Upgrades
Last but not least, Aave is adding a suite of features to prepare for it’s upcoming Genesis Governance marked by a migration from LEND to AAVE including:
- Vote Delegation – Assign voting weight to any protocol politician with the freedom to remove it at any time.
- Cold Wallet Voting – Vote on proposals without having to transfer tokens to a hot wallet
- Liquidity Mining Incentives – Aave community members are encouraged to discuss the first round of Aave liquidity mining on the governance forum.
Aave’s Future
All in all, Aave has set themselves up nicely to capture a variety of use-cases in the growing DeFi token bull run. With such an extensive amount of features, it’s no surprise that Aave is quickly gaining headway on Compound in terms of TVL and total protocol fees.
Following the migration to AAVE, the protocol will likely see a renewed spike in demand as AAVE rewards are added to the mix for both Safety Module stakers and protocol users supplying and borrowing capital from the protocol.
If nothing else, Aave has been exceeding all expectations with the number of releases they’ve shared in recent months. Now, we expect the protocol to be heads down on shipping all the aforementioned features in tandem with a successful migration to AAVE following the community’s approval in the first LEND Genesis Governance poll.
Until then, stay up with Aave by following them on Twitter or by joining the conversation on Discord.
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Cooper is the Editor of DeFi Rate and a contributor to leading DeFi outlets like the Defiant and Bankless. He is active in the DAO ecosystem through projects like MetaCartel and Raid Guild where he seeks to incubate governance models and grassroots community development. He is an ambassador of Set Protocol and the Director of Fitzner Blockchain Consulting where he authors a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.
