According to DeFi Pulse, the decentralized finance credit market (DeFi) Aave has surpassed the MakerDAO stablecoin for the title of most collateral in play on Ethereum (find out quotation in real time).
The fertile ground of DeFi
Aave now has $ 1,47 billion in various crypto assets pledged to credit lines, while MakerDAO has $ 1,45 billion in total value locked (TVL). “Achieving the highest TVL has been possible thanks to the wide range of Aave-based developers expressing their innovation in DeFi,” said Stani Kulechov, CEO of Aave.
"This innovation has aroused the interest of the institutions that are now tiptoeing into Aave". This is only the second case where a project has had more TVL than MakerDAO, according to data from DeFi Pulse.
On June 20, fueled by a yield race inspired by the initial distribution of its COMP governance token, Compound took the lead by setting collateral locked until the end of July.
Within context, however, when MakerDAO and Compound changed direction, each had about $ 480 million in TVL. MakerDAO now has well over double the insured warranties than before. In the recent wave of interest in DeFi, four projects surpassed $ 1 billion in digital assets according to DeFi Pulse: MakerDAO, Compound, Aave and Curve.
The financial giant Aave
Founded as EthLend, Aave was conceived as a peer-to-peer cryptocurrency lending agency, funded by a 2017 initial coin offering that raised $ 16,2 million, according to Messari.
Later it turned to the pool loan approach that it still uses today. In new yield grower communities devising wild patterns, Aave has proven to be a key financial behemoth for some projects, said CoinFund's Devin Walsh.
In particular, he noted that Curve and Yearn Finance rely on Aave. “Stablecoin deposits in one of these protocols will eventually be deposited in Aave's money markets. Both Yearn's and Curve's return-creation programs have contributed to TVL's massive spike in the past few weeks and particularly the past week, ”Walsh added.
Another relevant project is Opium, which on Saturday announced it had created a credit default swap (CDS) on the Aave protocol. A CDS is a type of contract that insures the buyer against a third party defaulting on a loan.
These tools are best known for their role in the 2008 financial crisis, although they likely provide markets with an early warning sign of credit problems. Aave has announced a governance token distribution plan, but hasn't activated it yet. So while liquidity mining is in the protocol, it's not driving the current growth.
