DeFi Blue Chip Aave Mounts 30% Rise

AAVE, the governance token underpinning the Aave protocol, has risen more than 30% over the past 24 hours. 

This puts the token at $235.92, according to data pulled from CoinMarketCap. This token, like many others in the world of decentralized finance (DeFi), is used to vote on updates to the protocol and participate in Aave’s governance measures. 

The latest price move comes in the wake of the protocol’s latest upgrade and ongoing interest from larger financial institutions. 

Launched on March 16, Aave V3 added cross-chain capabilities, layer-2 scaling solutions, and reduced the gas costs of interacting with the money market. 

The AAVE token was trading at roughly $121 at that time, marking the beginning of a continued upward trend. The price is still more than 66% away from its all-time high of $666.86 set in May last year.

Elsewhere, Brazil’s central bank has also included Aave in its list of eight other partners to build out its central bank digital currency (CBDC). Aave was joined by Santander Brazil, Mercado Bitcoin, Visa de Brasil, Unibanco, and others. 

Aave first launched in 2017 under the name ETHLend before rebranding roughly a year later. In that time, it has become one of the most popular decentralized finance (DeFi) protocols on the market, letting users lend and borrow a variety of different cryptocurrencies. 

The returns, as well as the cost to borrow different tokens, depend on the market’s supply and demand of these tokens. This means that amount of interest users can earn on, say, the stablecoin DAI depends on how many users are interested in borrowing DAI. Today, you can earn 1.83% interest on DAI, whereas it costs 3.2% to borrow the token. 

Aave’s DeFi activity on the rise

According to DeFi Llama, a DeFi-centric data dashboard, Aave’s total value locked has risen by 11.38% in dollar terms over the past week. Total value locked, or TVL for short, refers to the total amount of money inside the protocol. 

The total amount of money across all integrated networks is now at $22.93 billion, making Aave the largest DeFi protocol in this sector. The decentralized exchange (DEX) Curve is in second with $22.2 billion, followed by the crypto-staking platform Lido is the third-largest with $18.74 billion.

Including every DeFi project across all networks, there is currently $283 billion sloshing around the ecosystem. 

This time last year, that figure was barely $85 billion.