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The rise and rise of Aave: What’s next?

Posted by
Jon Jordan

Aave is the DeFi dapp with a TVL of $1.5 billion

Although launched as a simple saving-and-loans dapp, things are changing quickly for open source money protocol Aave.

Now firmly installed as a fundamental component of Ethereum’s DeFi stack, Aave’s liquidity pools and interest-bearing aTokens are being used by other developers in new and novel ways.

Most obviously, the protocol has been massively boosted by the current frenzy of Yield Farming, which has boosted the Total Value Locked within its pools to $1.4 billion.

That makes Aave the #2 DeFi dapp behind MakerDAO with a TVL of $1.5 billion, although as we point out, much of this increase is due to increasing crypto prices, not increasing collateral.

Its aTokens are also a fundamental part of the gaming-meets-DeFi project Aavegotchi, which will see NFT owners locking such collateral within the blockchain Tamagotchis they create.

The Aave team has plenty more ambitions though. They’ve announced they have gained an Electronic Money Institution license from the UK Financial Conduct Authority.

This means it will be possible for Aave to bridge into the world of fiat currencies, notably by providing such payment services to users. 

Previously, Aave has been a crypto-to-crypto-only product but now it will be able to onboard users without previous experience of setting up an Ethereum wallet and buying ERC20 tokens. Aave hopes to start a pilot scheme in the UK shortly. 

In other news, it’s also working on its forthcoming AAVE governance token, which will supersede its existing LEND token. Unsurprisingly its price is up 150% in the past month. 

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