- A proposal to launch Aave’s V3 iteration on Base has been approved by community members.
- AAVE sees an increasing distribution, which puts pressure on the price.
Aaves [AAVE] board forum approved a proposal to implement the V3 iteration of the lending protocol on the new Layer 2 (L2) scaling network Base.
How much are 1,10,100 AAVEs worth today?
The proposal was passed unanimously, with 100% of the vote in favour. As suggested by Aave founder Stani Kulechov, the implementation is expected to go live on Base this week.
Next week will be stationed further pic.twitter.com/hAbSjk7Fnl
— Stani.lens (@StaniKulechov) August 20, 2023
Under the proposal, this implementation will allow Aave users to deposit and borrow Wrapped Ethereum [WETH]USD base currency [USDbC]and Coinbase ETH (cbETH) on the base platform.
“The Base and Coinbase ecosystem is a good opportunity to expand for Aave, touching the new user base and exploring new use cases,” the protocol said, as the motivation behind the expansion.
The right timing for a new implementation?
While other leading decentralized finance (DeFi) protocols are lingering, Aave’s decision to launch on Base is well timed as the protocol attempts to move away from the aftermath of Curve Finance’s July 30 reentry attack.
Due to the exposure to the exploit, the TVL on the protocol has dropped sharply over the past month. According to DefillamaAave’s TVL is down 21.18% in the last 30 days, giving up its position as the second largest in terms of TVL to competitor MakerDAO [MKR].
The decision to launch its V3 iteration on Base, a newer network that has been well received by community members, could be an attempt to restore the confidence of liquidity providers who withdrew their funds following the Curve Finance hack, which caused a depleted part of Aave’s assets. .
Source: DefiLlama
This rollout also comes eight months after the same iteration launched and three months after it started live on L2 network Metis.
In addition, since its launch on the Ethereum MainnetAave V3 has attracted $2.33 billion in deposits and $811.85 million in loans.
With the increased activity on Base right now, the iteration could reach the 10,000 unique addresses on-chain milestone faster than on Ethereum.
The Aave V3 Ethereum market recently reached a remarkable milestone as it welcomed 10,000 unique addresses in just under six months. pic.twitter.com/RHs4qyk2nK
— Aave (@AaveAave) July 20, 2023
AAVE problems have yet to diminish
At the time of writing, the protocol’s governance token AAVE changed hands for $57.29. According to CoinMarketCap, the value of the alt is down 22% in the past month.
At the time of writing, the token’s Relative Strength Index (RSI) and Money Flow Index (MFI) were below their respective neutral regions. This showed that the sell-off was greater than the accumulation among daily traders.
Realistic or not, here is Aave’s market cap in BTC terms
Similarly, the Chaikin Money Flow (CMF) returned a negative value of -0.14 at the time of writing. This indicated greater capital flight as many token holders gathered to sell their assets.
Source: AAVE/USDT on TradingView
With a 91.4% drop from its all-time high, reached two years ago, 89% of AAVE holders had lost money, data from IntoTheBlock showed.
Source: IntoTheBlock