Tag: #AAVE

Aave Outpaces Market with 9% Growth in Q2 2023, Launches GHO Stablecoin

by Blockchain News

In decentralized finance (DeFi) world, Aave has emerged as a frontrunner, demonstrating a 9% quarter-on-quarter increase in total value supplied in Q2 2023, outpacing the broader market, according to a recent report by Messari.

The report reveals several significant shifts in the deposit market share within the Aave ecosystem. stETH, a tokenized version of Ethereum staked on the Ethereum 2.0 blockchain, saw a 5% increase in its deposit market share. This growth in stETH deposits was accompanied by a minor decrease in ETH deposits, while Wrapped Bitcoin (WBTC) deposits experienced an increase.

Aave’s revenue also saw a substantial increase, with a 14% rise quarter-on-quarter, primarily driven by activities on the Ethereum Mainnet. This growth in revenue is a testament to the protocol’s increasing popularity and user adoption. Furthermore, the revenue share from Aave’s V3 markets doubled, suggesting a significant user migration to this newer version of the protocol.

Aave launched its native over-collateralized stablecoin, GHO, on July 15, 2023. The GHO token offers an optimized fixed rate for borrowing against any collateral asset on the Aave V3 market. This innovative feature is expected to attract more users to the platform, further driving its growth.

The report also touched on the proposed Aave Forest framework, aimed at enhancing the protocol’s security. This proposal underscores Aave’s

commitment to providing a secure platform for its users, a critical factor in the DeFi space.

Additionally, the report hinted at the imminent release of Portals, following developments from Chainlink. The release of Portals has been eagerly anticipated by the Aave community, and its launch could potentially mark the end of delays in its rollout.

In conclusion, the Q2 2023 report underscores Aave’s continued growth and innovation in the DeFi sector. With the launch of the GHO stablecoin, the proposed security enhancements, and the anticipated release of Portals, Aave is poised to maintain its leading position in the DeFi space.

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$136M Inflow into Crypto Assets, Bitcoin Remains Preferred Choice

by Blockchain News

In the latest update from CoinShares, digital asset investment products have seen a significant inflow of $136 million in the past week. This surge marks the third consecutive week of inflows, totaling $470 million, effectively offsetting the outflows observed in the preceding nine weeks.

Bitcoin continues to be the primary focus for investors, with inflows totaling $133 million last week. This trend indicates a strong investor preference for Bitcoin over altcoins. In contrast, short-Bitcoin saw outflows of $1.8 million, marking its 11th consecutive week of outflows.

Despite the general upward trend, trade volume has decreased. Investment goods totalled $1 billion last week, down from $2.5 billion on average over the preceding two weeks. This volume decline might be attributable to seasonal impacts, since lower volumes are normal in July and August.

Ethereum, another significant participant in the digital asset market, had $2.9 million in inflows last week. However, it has profited only little from increased market sentiment. Inflows during the previous three weeks account for just 0.2% of total assets under management (AuM), compared to 1.9% for Bitcoin. Ethereum continues to have negative net flows year to far, with outflows totaling $63 million.

Other altcoins, including Solana, XRP, Polygon, Litecoin, and Aave, also experienced inflows. However, Cosmos and Cardano saw minor outflows.

In another noteworthy development, blockchain equities recorded the largest inflows for a year, totaling $15 million.

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Aave to Launch on zkSync with Overwhelming Support from Community

by Blockchain News

The Aave community has spoken, and the results are in. A proposal to launch the decentralized exchange (DEX) Aave on the zkSync Era Mainnet has received overwhelming support, with over 99% of AAVE tokenholders casting ballots voting in favor of the move.

The proposal, which was first pitched on March 26, outlined plans to launch the third version of the lending and borrowing protocol on the zero-knowledge Ethereum Virtual Machine (zkEVM). The launch will initially be limited to USD Coin (USDC) and Ether (ETH).

The proposal’s success in the “temperature check” stage means that the next steps listed in the proposal will be pursued. This will involve further discussion, followed by risk parameter evaluation and the finalization of the proposal. If successful, the proposal will then be submitted for on-chain governance approval.

While only around 0.02% voted against the proposal, and a further 0.02% abstained from voting, the overwhelming support from the Aave community is a significant milestone for the project. Deploying on zkSync has the potential to introduce new users to decentralized finance, as well as cementing Aave’s position as a premier borrowing platform within the zero-knowledge ecosystem.

The Aave community previously voted to deploy the Aave V3 codebase on zkSync’s v2 Testnet, which was approved in another off-chain vote. With this latest vote, Aave is another step closer to deploying on the zkSync Era Mainnet.

Aave is not the only decentralized exchange looking to leverage the benefits of zkSync. Uniswap is also set to launch on the scaling solution from Polygon after a successful governance proposal was passed.

Aave’s journey to this point has not been without its challenges. In November 2022, the platform changed its governance procedures after it was hit by a $60 million short attack that ultimately failed. However, the project has emerged from this setback with renewed vigor and determination, as evidenced by the overwhelming support for its latest proposal.

Overall, the launch of Aave on zkSync has the potential to be a game-changer for the decentralized finance space, and it will be interesting to see how the project progresses in the coming months.

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Aave Freezes Stablecoin Trading Amid Price Volatility

by Blockchain News

Aave, a popular lending protocol in the decentralized finance (DeFi) space, has taken action to mitigate the impact of recent price volatility in the stablecoin market. On March 11, the price of USD Coin (USDC), a commonly used stablecoin, depegged, leading to concerns over the stability of other stablecoins. In response, Aave has temporarily frozen trading of stablecoins and set the loan-to-value (LTV) ratio to zero.

The decision to freeze trading was based on an analysis by Gauntlet Network, a DeFi risk management firm, which recommended a temporary pause of all v2 and v3 markets. Aave’s governance forum noted that setting the LTV ratio to zero would “discount the borrowing power of the asset” without affecting the health factor (HF) of any user position. The HF is a measure of the risk associated with a user’s position on the Aave platform.

The LTV ratio is an important metric for determining the amount of credit that can be secured using crypto as collateral. When a user borrows funds on the Aave platform, they must put up collateral in the form of crypto assets. The LTV ratio is calculated by dividing the amount of credit borrowed by the value of the collateral. A higher LTV ratio means that a user can borrow more funds with less collateral, but it also increases the risk of liquidation if the value of the collateral decreases.

By setting the LTV ratio to zero, Aave has effectively suspended all borrowing against stablecoins. This move is designed to protect users from the risk of liquidation during a period of heightened volatility. However, it also means that users who have already borrowed funds using stablecoins as collateral will need to find alternative sources of collateral or risk having their positions liquidated.

The decision to freeze trading of stablecoins on Aave also highlights the growing importance of stablecoins in the DeFi ecosystem. Stablecoins are designed to maintain a stable value relative to a particular currency or asset, such as the US dollar or gold. They are commonly used as a form of collateral on DeFi platforms, allowing users to borrow and lend funds without being exposed to the volatility of other cryptocurrencies.

However, as the recent depegging of USDC demonstrates, stablecoins are not immune to price volatility. This can create risks for users who rely on stablecoins as collateral, as a sudden drop in value can trigger liquidations and result in the loss of funds. Aave’s decision to freeze trading of stablecoins and set the LTV ratio to zero highlights the need for greater risk management measures in the DeFi ecosystem.

In conclusion, Aave’s decision to freeze stablecoin trading and set the LTV ratio to zero is a response to the recent price volatility in the stablecoin market. The move is designed to protect users from the risk of liquidation during a period of heightened volatility but also means that users who have already borrowed funds using stablecoins as collateral will need to find alternative sources of collateral. This decision underscores the importance of stablecoins in the DeFi ecosystem and the need for effective risk management measures to protect users. Stablecoins play a crucial role in DeFi by providing a stable asset that can be used as collateral for loans and other financial activities. However, as Aave’s decision demonstrates, stablecoins are not immune to price volatility and can create risks for users if their value suddenly drops.

To address these risks, DeFi platforms like Aave need to implement effective risk management measures that can help protect users from the impact of market volatility. This includes setting appropriate LTV ratios that balance the need for collateral with the risk of liquidation, as well as monitoring the market for signs of instability.

In addition to risk management measures, there is also a need for greater transparency and accountability in the DeFi ecosystem. Users need to be able to trust that the platforms they are using are safe and secure, and that their funds are protected from theft or other forms of loss. This requires clear and transparent reporting of platform performance, as well as robust security measures to prevent hacks and other forms of cyber-attacks.

Overall, the recent decision by Aave to freeze stablecoin trading and set the LTV ratio to zero is a reminder of the risks associated with stablecoins in the DeFi ecosystem. While stablecoins can provide a stable asset for collateral, they are not immune to market volatility and can create risks for users. To address these risks, DeFi platforms must implement effective risk management measures and ensure transparency and accountability in their operations. By doing so, they can help build trust and confidence in the DeFi ecosystem and promote its continued growth and development.

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Aave DAO Passes Proposal to Recover Lost Tokens

by Blockchain News

The Aave decentralized autonomous organization (DAO) has passed a proposal called “Rescue Mission Phase 1 Long Executor” to recover lost tokens for some users who mistakenly sent them to certain token contracts in the past. This proposal authorizes Aave developers to upgrade the smart contracts and send the lost tokens back to their original owners automatically.

The confirmed proposal only affects lost AAVE, LEND, Tether, UNI, and staked AAVE tokens that were mistakenly sent to the AAVE token contract, the LEND token contract, the LendtoAaveMigrator, or the stAAVE token contract. The proposal also authorizes the team to initialize a new implementation for these contracts. During the initialization, the lost tokens will be sent automatically to a separate AaveMerkleDistributor contract, where they will then be sent to the owners.

However, the proposal’s text emphasizes that these tokens will only be transferred during the contracts’ initialization phase. It implies that only tokens lost in the past will be recoverable. Future tokens mistakenly sent to these addresses may be permanently lost unless a new proposal is passed in the future.

Losing tokens by mistakenly transferring them to a token contract is a common problem in the crypto community. Many tokens and Ether are locked in the Ethereum null address (0x0) and token contracts. For instance, an Ethereum user once lost over $500,000 worth of wrapped Ether (wETH) by transferring it to the wETH token contract instead of calling its “unwrap” function as they intended.

If a contract cannot be upgraded, tokens lost in this way are usually impossible to recover. By their nature, crypto transfers are supposed to be immutable. So, even if mistaken transfers can be reversed, attempts to do so are sometimes controversial.

In 2016, The DAO, an early version of today’s DAOs, was exploited for $60 million worth of ETH, which the investors in The DAO presumably did not intend to happen. The majority of Ethereum validators implemented a hard fork to reverse the exploit transaction, but some validators rejected this move, creating Ethereum Classic in the process.

Unlike The DAO controversy, the Aave DAO vote to rescue the lost tokens was not nearly as controversial. The proposal passed with more than 99.9% of the vote, and only one user voted against it using a single AAVE token.

The recovery of lost tokens is a significant achievement for the Aave DAO community. It shows that decentralized autonomous organizations can provide a safety net for users who make mistakes in their crypto transactions. However, it also raises questions about the immutability of blockchain transactions and whether DAOs should have the power to reverse them.

It remains to be seen whether this proposal will set a precedent for future DAO decisions or whether it is a one-time event. Nevertheless, it is a step forward in addressing the problem of lost tokens and ensuring that the crypto community remains a safe and reliable place for users.

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The DeFi space is on a path of steady recovery as good actors

by Blockchain News

The harm that was inflicted by the collapse of major cryptocurrency ecosystems in the previous year is on its way to making a gradual comeback as positive actors take aggressive initiatives to reestablish investors’ faith. Principal participants from the ecosystem of decentralized finance (DeFi) got together to discuss the benefits of running trustless, interoperable, and permissionless systems.

Over thirty DeFi protocols participated in an endeavor to “permissionlessly” distribute tweets from other protocols for a period of twenty-four hours, beginning on February 6 and continuing until February 7. This served to showcase the permissionless and interoperable nature of Web3.

This campaign has contributions from a number of different projects, some of which include Yearn.finance, MakerDAO, SushiSwap, and Aave.

Despite the fact that DeFi has gained widespread recognition and big institutions have made their entry into the field, its image is still fragile owing to the numerous exploits that it has participated in.

The chief marketing officer of MakerDAO, Mamun Rashid, said that in order to fulfill the “full potential” of DeFi, there has to be a partnership between the ideas and the talent that is present in the field.

“By working together, we will be able to push the limits of conventional banking and create a financial system that is more welcoming and accessible thanks to decentralized money.”

The “spirit” of DeFi was characterized as a more collaborative environment, rather than a more competitive one, by the projects that were working together on the campaign.

According to Jared Grey, CEO of SushiSwap, the goal of the construction of DeFi is to disrupt the status quo of recognized financial frameworks, which have traditionally been known to impose hurdles and decrease economic freedom.

“By using the modularity of this cutting-edge technology, we are able to democratize the financial industry and provide tools and services that are more egalitarian, safer, and more transparent to an audience on a global scale.”

According to what Grey stated, the obligation to represent the genuine meaning of Defiantly Fiction begins in the space itself. Therefore, the initiative taken by more than 30 builders inside the area and the unity shown by those builders came at a crucial moment.

The DeFi domain has been a primary focus of adventures throughout the course of the last year. According to a study that was compiled by Beosin in 2022, the greatest number of assaults were launched against DeFi-based initiatives.

This weakness was the root cause of a 47.4% increase in security losses in 2022 when compared to the previous year’s total of $3.64 billion in losses, which came to a total.

Additional research from the industry has shown that it is reasonable to anticipate that the current trend of DeFi exploits will continue into this year owing to the introduction of new products to the market and the development of more skilled cybercriminals.

According to a research published by DappRadar, despite this, the industry saw strong growth to begin the year. To encourage more people to use DeFi and Cosmos, the company Injective established a new ecosystem fund in the amount of $150 million in January.

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After a $60M short assault, Aave recommends governance reforms.

by Blockchain News

On November 23, one day after Mango Markets’ exploiter Avraham Eisenberg tried to exploit the decentralized finance protocol AAVE through a series of clever short sells, project contributors put up a variety of ideas to cope with the consequences of the incident. These ideas included a variety of different ways to deal with the aftermath of the incident. These suggestions included a wide range of potential approaches to addressing the fallout from the occurrence in question.

According to the protocol engineer Llama and the financial modeling platform Gauntlet, both of whom are deployed on Aave, Llama reported that the user had been liquidated, albeit at the expense of $1.6 million in bad debt, most likely as a result of slippage. In other words, the user was liquidated at the expense of the platform. To put it another way, the user was kicked from the platform at the cost of the service. Avenue is the street that is home to both of these places.

Moving ahead, Llama’s proposition requires that the unpaid debt be settled using money from the bankruptcy fund of the Gauntlet and the Ave Treasury.

Another suggestion that was made by Gauntlet calls for the temporary freeze of a list of token markets on Aave v2, which would include the Curve DAO Token. This particular token would be included in this list. This is the second recommendation that has been offered.

The day prior, Eisenberg made an effort to provoke a liquidity crisis on Aave by shorting a big amount of CRV, which did not have a liquid market on the platform. This action was done in an attempt to profit from the situation. The very high slippage that took place (which went up to 90%), caused the smart contracts to be forced to buy back the holdings at a loss.

In spite of this, the transaction was unsuccessful due to the fact that Eisenberg was liquidated with a far less amount of slippage than was anticipated.

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MAS Launches First DeFi Pilot Tests With Polygon and Aave

by Blockchain News

The Monetary Authority of Singapore (MAS) has announced that it has succeeded in conducting wholesale transactions launching with a focus on exploring both digital assets and the Decentralized Finance (DeFi) ecosystem.

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The concluded pilot program accounts for one of the apex banking regulators of testing the application of asset tokenization and DeFi across a broader range of use cases in the financial sector. 

As revealed by the MAS, mainstream financial services players including DBS, JPMorgan Chase & Co, and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD). 

A major highlight of the pilot test as confirmed by JPMorgan’s Ty Lobban is that the MAS built the test environment around two of the industry’s most used blockchain protocols including Polygon, a Layer-2 protocol on the Ethereum network as well as Aave, one of the pioneering DeFi lending protocols.

Riding on the capabilities of DeFi protocols to eliminate middlemen by powering transactions directly between two entities using smart contracts, the MAS said the first pilot tests helped cut off transaction costs and the delay experienced through Clearing and Settlement Intermediaries respectively.

Advancing Project Guardian

The MAS launched the DeFi pilot test under Project Guardian and it has outlined avenues to continually participate in industry pilots, studying regulatory and risk management implications as well as helping to develop technical standards that can help foster a robust crypto ecosystem.

“The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralised finance have the potential to transform capital markets,” said Sopnendu Mohanty, Chief FinTech Officer of the MAS. 

“This is a big step towards enabling more efficient and integrated global financial networks. Project Guardian has deepened MAS’ understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy. We look forward to working with more institutions to advance global learning on policies, standards, and best practices for digital asset regulation and responsible innovation.”

The MAS comes off as one of the most proactive central banks whose interest to help develop blockchain and crypto-related solutions are made evident by its targeted activities. Considering the recent collapse of the Terra ecosystem and its impact on the broader market, the MAS is showing more commitment to tightening its grip on the industry, but not so bad as to harm innovations.

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Controversial Entrepreneur Sifu is Back with New DeFi Lending Protocol Forked from Aave

by Blockchain News

DefiLlama- a DeFi TVL aggregator, announced on Monday that Sifu, the pseudonymous co-founder of failed Canadian crypto exchange QuadrigaCX, has launched a new decentralized finance (DeFi) protocol called UwU Lend.

UwU Lend is forked from lending giant Aave, a liquidity market that offers depositing and borrowing, DefiLlama stated. Users can borrow against the platform’s native token, UWU and an algorithmic stablecoin named Magic Internet Money (MIM). In other words, users earn interest on deposits and pay interest to borrow.

The project went live on Sep. 21 and has already secured $57.5 million in total value locked (TVL). UwU is different from other lending protocols. The DeFi platform accepts collateral not available on other lending protocols like Aave and Compound — users can borrow against tokens like Sifu’s own SIFU and the over-collateralized stablecoin MIM.

Why the public finds it difficult to accept Sifu

What makes this report interesting is that Sifu’s reappearance comes after a few difficult years following the collapse of QuadrigaCX.

In January, Sifu, whose real name is Michael Patryn, was revealed to be one of the co-founders of a notorious Canadian crypto exchange that defrauded investors of more than $190 million in 2019.

During that time, the pseudonymous treasury manager for decentralized finance (DeFi) protocol, Wonderland, was revealed as Michael Patryn. Wonderland felt the heat after its users revealed its Treasury Head, Michael Patryn, also known as Sifu or 0xSifu.

Wonderland founder Daniele Sestagalli responded to the criticism, stating he was aware of the situation. But he chose to overlook it based on believing that an individual’s past does not determine their future. However, his view was not received well by investors, who remained sceptical of Patryn’s involvement with the project, especially as his role relates to funding management.

Despite Sestagalli’s initial support for Patryn, upon reflection, he later asked Patryn to step down until a community vote determined whether he could stay on. But in early February, Wonderland launched a vote and unanimously passed a decision to remove Sifu from his position as treasurer.

Patryn co-founded Canadian exchange QuadrigaCX, which went bankrupt in 2019 amid suspicious circumstances, including the death of its CEO, Gerald Cotten. QuadrigaCX was founded by Gerald Cotten and Patryn in 2013 and quickly became one of the largest crypto exchanges by trading volumes in Canada. But in 2019, the exchange turned out to be a Ponzi scheme that defrauded investors’ crypto funds worth over 190 million in connection to the death of its CEO, Gerald Cotten.

Patryn has changed his name on several occasions to conceal his identity. He has been previously convicted of credit card fraud and pleaded guilty to several related offences in the early 2000s.

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Aave Integrates with Pocket Network for Dapps Development

by Blockchain News

Aave announced Tuesday about an integration with the distributed network of more than 44,000 nodes on the Pocket Network to enhance decentralised application development.

Following the new integration, the Aave-based DApps can access on-demand blockchain data from Pocket Network.

Aave is an open source and non-custodial DeFi Protocol which enables the creation of money markets. Aave’s native cryptocurrency is called LEND. According to the FCA, Aave’s UK business entity was granted an Electronic Money Institution (EMI) license on July 7.

CEO of Pocket Network, Michael O’Rourke, said, “The goal is to power the next wave of decentralised applications that combine Aave’s best-in-class liquidity market with Pocket’s unrivalled RPC coverage, which now supports 50 blockchains and is well on its way to achieving its goal of 100 blockchains in 2022.”

Pocket Network Inc. is a software startup building a universal, decentralised API protocol for blockchains. Its function is to provide an extensive relay network for API requests from major blockchains. Its cryptoeconomic model can minimise developer costs while delivering value directly to full-node operators.

Pocket provides Remote Procedure Call RPC access to Ethereum, Polygon, and a dozen more blockchain networks.

The integration with Pocket Network provides a more stable development environment to enhance the development of decentralised applications, reduce latency, improve uptime and provide services such as optimised multi-chain data.

According to DEFI pulse, Aave Protocol currently has the fourth highest TVL of $4.86B.

Currently, at $95.91, it is up 33.65% over the past week as of this writing.

Stani Kulechov, the founder of Decentralized Finance (DeFi) lending protocol, Aave has spearheaded the emergence of Lens Protocol, an ecosystem that seeks to boost a permissionless, composable, and decentralised social graph that makes building a Web3 social platform easy.

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