Aave announces V3 update to introduce cross-chain functionality and support for Layer 2 networks

• Aave recently announced the next update, V3, which introduces several key features of the DeFi protocol.
• The lending protocol will enable cross-chain functionality that allows assets to be moved between Aave delivery networks.
• Aave V3 reduces fees and transaction times while improving user experience and reliability.

Decentralized Financial Lending Protocol Aave has announced the next update V3, which will include improvements to the user experience, risk management and the token listing process. The blockchain aims to create the next generation Layer 0 DeFi protocol and introduce new features.

Aave becomes the next generation Layer 0 DeFi protocol

Aave recently released an update to its V3 upgrade that will introduce new features to the platform. The DeFi protocol is designed to improve user experience, capital efficiency, decentralization and security.

The listing of new assets would also be decentralized so that Aave Governance could give companies the right to list cryptocurrencies on the platform through an on-chain vote. This would be more efficient on V3 as the current listing process requires a suggestion and is extensive.

Supply caps, credit caps, and other restrictions are enabled by governance members and administrators to reduce risk. An isolation mode is also introduced, including debt caps, to further improve risk management.

The update will include a few other important features, including support for Layer 2 networks running on Ethereum. This would also reduce fees and transaction times by eliminating the need to move funds around Ethereum’s congested network, improving the user experience and reliability.

Aave V3 would also introduce a new cross-chain feature that would allow cryptocurrencies to be moved between Aave deployments on different networks, including Ethereum, Solana, Polygon and Fantom.

According to Aave, the V3 update will create the “next generation layer 0 DeFi protocol”.

Aave price is gearing up for departure

Aave price was caught in a continuation pattern on the daily chart as AAVE struggled with a rally as multiple resistances weighed on it.

Aave price is nearing the apex of the symmetrical triangle pattern and a key break above $ 346.80 could spur AAVE on.

The 100-day and 200-day Simple Moving Averages (SMAs), which coincide with the upper bound of the prevailing chart pattern at $ 346.80, continue to act as a strong hindrance and will not let the aave price up. A section above this level could see the next AAVE rally.

AAVE / USDT daily chart

If Aave price continues to consolidate, AAVE will see immediate support on the 21-day SMA at $ 318 and then the 50-day SMA, which corresponds to the lower bound of the triangle at $ 306.30. With further selling pressure, the DeFi token could fall towards the 23.6% Fibonacci retracement level at USD 286.80.