We've officially reached the $100M market size milestone! 🥂🎊🎉
Much ❤️ to the Aave & DeFi Fam. We could not have done this without all of your feedback and support!
Data credits to @defipulse 🙏
🔊sound on pic.twitter.com/v4UXQKpFue
— Aave (@AaveAave) June 10, 2020
As illustrated in the video above, Aave his seen unprecedented growth in recent months, largely due to their novel approach for providing deep composability when it comes to lending and borrowing popular DeFi tokens.
Stani Kulechov, CEO of Aave added some color to this milestone stating that “Passing $100M market size within a few months after launch supports the fact that decentralized finance is becoming increasingly popular and easier to interact with.”
Perhaps best highlighted by their recent introduction of Uniswap Money Market, Aave is pioneering what cryptocurrency lending can consist of by giving users the ability to borrow against interest-earning collateral in ways previously unheard of in legacy finance.
When taking a glimpse back on our interview with Stani in March, it’s clear that Aave has always had a creative eye for money market interactions. Initially popularized through their Flash Loans feature, the introduction of new money markets like Uniswap (and soon Set Protocol) shows the London-based company is making every attempt to highlight the power of DeFi.
Now, with sector-leading interest rates, open-sourced risk frameworks, and the upcoming transition to decentralized governance, the case for Aave as a community-operated money market protocol has never been stronger.
LEND Surges in Light of Growth
While exact details have yet to be released, Aave has hinted that LEND will be used as a voting proxy for important protocol decisions like fees, interest rates and asset integration.
Plus, with DeFi tokens like LEND continuing to make headway, it’s exciting to see that major centralized players – like Coinbase – are starting to take note. Earlier this week, LEND was signaled as one of the 18 new assets being considered for listing by the US leading exchange. Referencing the recent listing of Maker’s MKR and this week’s surge for Kyber Network’s KNC, it’s evident that Coinbase traders have demonstrated a clear demand for leading DeFi tokens like LEND.
Coinbase is exploring the addition of 18 new digital assets, some are live, some are not. We will evaluate each against our Digital Asset Framework. It’s our goal to offer support for all assets that meet our standards and are compliant with local law. https://t.co/IN4g4WfYjW
— Coinbase (@coinbase) June 10, 2020
Aave’s History & It’s Impact
Rounding out this article, it’s fascinating to consider how Aave’s roots as ETHLend have influenced its recent success. While we’re quite bullish on Compound and their upcoming COMP distribution, there’s something to be said for LEND’s 3+ years trading on the open market.
3 years ago today, a part of DeFi history was written with the first smart contract based loan on Ethereum! We've definitely come a long way since then with a much-sleeker UI/UX.
— Aave (@AaveAave) June 8, 2020
This “token-first” approach to fundraising paves a strong signal that the Aave core team is highly aligned with the community in regards to ensuring LEND’s value capture mechanisms are as strong as possible. We’ve seen this first hand with ~80% of protocol fees being used to burn LEND off the open market, and expect this trend to continue in the form of secondary liquidity and asset solidification in the case of supported collateral types in Maker.
— stani.eth ’$LEND/aUSDC Maximalist’ Kulechov 👻 (@StaniKulechov) June 12, 2020
While LEND as the next collateral type in Maker is certainly ambitious, the clear picture here is that token-first ecosystems are ones that truly exhibit the power of web 3, and we commend Aave for its tenacity and growth to get to this point.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.