Aave – a protocol for creating money markets – exceeded a market size of USD 100 million after its introduction in January half a year ago.
We officially hit the $ 100 million milestone! 🥂🎊🎉
Much ❤️ to the Aave & DeFi Fam. We could not have done this without all of your feedback and support!
Dates are credited to @defipulse credits
🔊Sound on pic.twitter.com/v4UXQKpFue
– Aave (aveAaveAave) June 10, 2020
As shown in the video above, Aave has seen unprecedented growth in recent months, largely due to its novel approach to ensuring deep compositional ability when borrowing and borrowing popular DeFi tokens.
Adding color to this milestone, Stani Kulechov, CEO of Aave stated, “Exceeding the market size of USD 100 million within a few months of launch supports the fact that decentralized finance is becoming increasingly popular and easier to interact with.”
Perhaps best highlighted by the recent launch of Uniswap Money Market, Aave is pioneering cryptocurrency lending by giving users the ability to borrow against interest-bearing collateral in ways previously unknown in legacy finance.
If we look back at our interview with Stani in March, it is clear that Aave always had a creative eye for money market interactions. The introduction of new money markets like Uniswap (and soon Set Protocol), originally popularized through its Flash Loans feature, shows that the London-based company is making every effort to highlight the power of DeFi.
With industry-leading interest rates, open source risk frameworks, and the impending transition to decentralized governance, Aave has never been more prominent as a community-run money market protocol.
Loan increases with growth
For strangers, Aave is powered by a native token – LEND – which will be updated shortly to play a crucial role in controlling the protocol.
Although the exact details have not yet been released, Aave has indicated that LEND will be used as the proxy for key protocol decisions such as fees, interest rates, and asset integration.
As DeFi tokens like LEND continue to advance, it’s exciting to see large centralized players – like Coinbase – gradually taking notice. Earlier this week, LEND was signaled as one of 18 new assets being considered for listing by the leading US exchange. From Maker’s MKR’s recent listing and Kyber Networks KNC’s surge this week, it is clear that Coinbase traders have shown clear demand for leading DeFi tokens like LEND.
Coinbase is considering adding 18 new digital assets, some live and some not. We will evaluate each against our digital asset framework. Our goal is to provide support for all assets that meet our standards and comply with local laws. https://t.co/IN4g4WfYjW
– Coinbase (@coinbase) June 10, 2020
Aave’s story and its implications
Rounding out this article is a fascinating look at how Aave’s roots as ETHLend have influenced its recent success. While we’re pretty optimistic about Compound and the upcoming COMP distribution, there is something to be said for LEND’s more than three years of open market trading.
3 years ago today, part of DeFi history was written with the first smart contract loan on Ethereum! We’ve definitely come a long way since then with a much leaner UI / UX.
Witnesses to DeFi history: https://t.co/g3Fr7lQFAB$LEND $ ETH #BuiltOnEthereum #DeFi
– Aave (aveAaveAave) June 8, 2020
This “token-first” approach to fundraising is a strong signal that the Aave core team is highly connected to the community to ensure that LEND’s value-capturing mechanisms are as strong as possible. We saw this firsthand when ~ 80% of protocol fees were used to burn LEND from the free market and we expect this trend to continue in the form of secondary liquidity and solidification of assets with collateral types supported in Maker.
$ LEND upper limit on $ DAI, should LEND be a security in Dai? @ AaveAave community knows better 👻 pic.twitter.com/vGwpNyfjJV
– stani.eth ‘$ LEND / aUSDC maximalist’ Kulechov @ (@StaniKulechov) June 12, 2020
While LEND is certainly ambitious as the next type of security in Maker, the clear picture here is that token-first ecosystems are the ones that really have the power of Web 3, and we praise Aave for its tenacity and growth to get to this point to get.
To keep up to date with Aave, we recommend following them on Twitter or joining the discussion on Discord.
Cooper is the editor of DeFi Rate and an active contributor to leading DeFi media outlets such as The Defiant, DeFi Pulse and Bankless. He works with early-stage teams through Fire Eyes DAO to promote governance models and community development. He is an ambassador for Set Protocol and the author of a weekly publication called Token Tuesday. Follow him on Twitter to keep up-to-date with Cooper.
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