The Aave protocol rolled out its version 3, or V3, and launched it in January 2017. It said this is its most significant upgrade. This release emphasizes risk management and capital efficiency. So far, Aave V3 has been deployed on several networks, such as Polygon, Arbitrum, Optimism, and Avalanche, except Ethereum. However, the Ethereum blockchain is the first and largest market for the Aave protocol. Now, after several years, Aave finally decides to deploy its version 3 on the smart contracts platform.
V3 deployment is subject to community vote
Currently, all participating AAVE token holders are invited to give their opinion for an upcoming V3 rollout. Until January 25, 2023, 18:58 UTC, they vote for the arrival of the V3 of the protocol on Ethereum. If the Aave community agrees to this deployment, it will take place on Friday, January 27. CoinDesk reported this information in an article published on January 24. The day before, through a tweet, Aave had presented the V3 to be launched on the Ethereum mainnet API.
Aave V3 aims to improve risk management, user experience and capital efficiency. She could improving the lending and borrowing markets for staked ether from Lido. This was reported by Kethfinex, a spokesperson for Lido, which is a major Ethereum DeFi protocol. The spokesperson argued:This is a big step forward for the Ethereum DeFi space“.
Features coming to Ethereum with V3
V3 will bring as a new feature the efficiency mode, or eMode. The assets that will be considered are: wBTC, wETH, wstETH, USDC, DAI, LINK and AAVE. But you should know that not all the functions of V3 will be activated from the start of the deployment.
This is for example the case of the isolation mode functionality allowing certain assets to be borrowed up to a specific debt limit. Also, a statement was made about the initial interest rate models on V3. It appears that these modelswill follow those on Ethereum V2 assets and other existing V3 instances“.
Currently, Aave is positioned as the largest lender in the DeFi space. The protocol has $3.8 billion in total value locked (TVL) across the Ethereum ecosystem. That said, the announcement of the possible arrival of V3 of Aave on Ethereum is delighting several players, thanks to the features to come.
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