Decentralized lending DeFi protocol Aave is leading the Ethereum financial ecosystem with over $15.000 billion in liquidity.
Aave is gaining leadership in the ecosystem of decentralized finance, better known as DeFi, of EthereumWith a total liquidity of $15.450 billion, Aave is currently the #1 protocol within this digital ecosystem, in terms of Total Value Locked (TVL). The latter refers to the amount of money that investors and users jointly hold deposited within a protocol’s contract.
According to data According to DeFi Pulse, one of the most well-known DeFi data and metrics providers, Aave’s total liquidity or TVL has grown by over 1.000% over the past year. As of August 2020, the value locked within Aave was just over $1.500 billion.
Source: DeFi Pulse
Although Uniswap, the leading DeFi decentralized exchange, remains the most used protocol by trading volume, far behind Aave in terms of deposited liquidity. In fact, DeFi Pulse data shows that Uniswap’s current TVL is close to $6.780 billion; a figure that is not insignificant but gives it the #6 spot among the most important protocols in the ecosystem.
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Aave and Wall Street
One of the factors that may be driving Aave’s liquidity, and also the price of its AAVE token on the markets, is the potential entry of Wall Street investors into the world of decentralized finance. Last month, Aave CEO Stani Kulechov confirmed that the protocol will launch a financial tool focused on institutional investors.
The tool, called Aave Pro, is specifically designed to enable institutional and corporate investors to enter the world of DeFi and decentralized assets. According to Kulechov, Aave Pro is an essential tool to propel this digital financial ecosystem to a new level and also to meet the growing demand from various institutions, such as management funds, hedge funds, and more, to participate within this decentralized ecosystem.
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The expansion of the decentralized lending protocol to other networks block chains More scalable and accessible blockchains like Polygon are also helping Aave increase its total liquidity. The DeFi protocol’s homepage shows that its current TVL is over $24.011 billion. However, it should be noted that the total liquidity reflected on DeFi Pulse is proportional to TVL deposited in the protocol within the Ethereum network, while on the website the protocol displays its total liquidity including the value locked in the Polygon scaling network.
Source: Aave.com
The growth in Aave’s total value locked on Polygon is truly astonishing, considering the protocol’s deployment on the scaling network happened just over two months ago.
DeFi at new highs
The growth in Aave and other protocols in the ecosystem has had a positive impact on the entire DeFi. At the time of writing, Ethereum's decentralized financial ecosystem exceeds a value of 84.000 million. Similarly, another major industry data provider called DeFi Llama reveals that the total liquidity of decentralized finance, including other blockchain networks such as Solana, Avalanche, and the BSC, is 150.730 million; so the ecosystem is about to reach its historical maximum seen in May, when it reached 155.000 billion dollars.
NOTE: This article was updated after publication to specify that Aave's total liquidity on Ethereum is $15.450 billion.
Continue reading: Aave doubles its liquidity in the last month, after integrating with Polygon
