Developers have finally launched Aave Protocol V2 after successfully migrating tokens, handing over admin keys, and introducing governance. Just like many other projects in the DeFi market, Aave finally upgraded to a better version compared to what its creators have originally designed.
As the 4th leading blockchain protocol in this niche, Aave is destined to hold its dominance as one of the best lending protocols in DeFi. But what does the new protocol bring?
On December 3, founder and CEO Stani Kulechov announced the arrival of Aave V2. His new blog post begins on a lighthearted note, discussing the first protocol version and how it vastly improved the DeFi space.
Kulechov expands on Aave’s history, stating that the project reached a $1 billion market size in less than 6 months. As such, Aave is one of the fastest-growing projects in not just DeFi but in the entire crypto market.
Showcasing the ethos of Aave and what the team focuses on the most, the CEO says that the protocol is all about decentralization and that it finally turned into a completely permissionless network in the past couple of months.
But as the project moves forward, Kulechov explains that it is time to focus on the future. In a Medium blog post, the successful founder reveals everything new at Aave Protocol V2.
What is new at Aave V2?
In V2, Aave completely revolutionized collateral and how it is being used. Originally, users had to lock up their collateral and were not able to access it. Now, it is possible to collateralize crypto assets and use them all over the Aave protocol. Essentially, this means that users can now trade their deposited assets.
Flash loans represent another major and overhauled feature in the new protocol. They were the first type of loan that does not require collateral and have thus quite changed the outlook for lending protocols. In V2, Aave has improved upon flash loans and has integrated them with several other features.
On that account, we see Aave introducing new ‘batch’ flash loans. Originally, flash loans only allowed users to borrow one asset at a time. But now, it is possible to execute a single flash loan that borrows multiple cryptocurrencies within a single transaction, massively saving on gas fees.
Likewise, the team has also made improvements regarding gas costs. According to the blog post, certain types of transactions now have 50% lower gas fees. Since Ethereum began to experience another wave of heavy network congestion and high transaction costs, the Aave team has decided to develop a solution to this problem. While the details remain unknown, it is possible that their transactions are now indeed 50% cheaper.
Aave celebrates launch with a contest & giveaway
To celebrate the launch of Aave V2, the team decided to work with Coingecko on a contest. The two will give away unique Aave-themed accessories, as well as a special NFT to only 10 users. Furthermore, Aave will reward the first 100 addresses that use V2 and deposit more than $100 with another set of unique NFTs.
As Defiye previously reported, the Aave community is alive and well and continues to participate in governance. Following the first governance proposal which initiated the LEND-AAVE migration, the community has submitted two more proposals. With such a lively community, it is really no wonder that Aave is ranked so high.