Aave Protocol Unfazed By Market Jitters, Surges 21%
2024年8月7日 - 6:30AM
NEWSBTC
Crypto lending protocol Aave restarts its bullishness as the market
resets. AAVE, the namesake token of the platform, surged to nearly
20% in the past 24 hours, capturing the momentum of the broader
market which is still up by over 5% since yesterday. Related
Reading: Binance Coin In Turmoil: Nearly 10% Value Erased In Market
Shake-Up Aave’s recent developments also contributed to this rally.
However, the broader crypto-finance market might be in disagreement
with the platform’s current performance. $200 Million In Market
Size Unlocked On Aave Lido Finance, a crypto staking platform,
recently onboarded the platform’s Lido V3 market instance,
custom-made for Aave which is tailored to Lido’s staked Ethereum
(stETH) and wrapped staked Ethereum (wstETH). This will
significantly improve user experience in lending and borrowing
stETH and wstETH as it can be fine-tuned to maximize profitability
for Aave users. The Lido V3 market on @aave has been live for
48 hours and just surpassed $200m in market size 👻 Here’s what you
need to know 👇 pic.twitter.com/aNSGxsq2fy — Lido (@LidoFinance)
July 31, 2024 This helped AAVE recover in price. The platform also
experienced a significant bump in the total value locked (TVL) with
a near 10% increase since yesterday. However, the broader market
seems to be at odds with Aave’s recent bullishness. The 2nd quarter
revealed some cracks within the lending portion of the
decentralized finance (DeFi) space. According to CoinGecko’s 2nd
Quarter research, over $31.87 billion in TVL is dedicated to
lending, marking a significant cut of the pie on DeFi. However, the
main functions of DeFi such as staking, lending, and cross-chain
bridges saw a huge decrease in TVL, totaling over $8 billion.
The value that left these sectors returned in the form of restaking
in other platforms or to basis trading protocols that saw a
whopping 154% increase in TVL in Q2. This decrease in lending
activity also translated to the assets on the platform.
Blockanalitica reveals that a majority of the wallets that hold
collateral on Aave are either medium or high risk. If the market
drops by 25%, majority of the wallets are in the red which
represents liquidation. This shows that lending on DeFi remains to
be dangerous, especially with the current market volatility
experienced this week. A Short Squeeze? AAVE is currently
occupying the range between $93 and $102. This position, although a
big downgrade from its return from June price levels, is a solid
support for a possible breakthrough in the near future. Related
Reading: Bloody Monday: Cardano Not Spared From Bloodbath, Suffers
30% Loss However, as it moves independent of the market, this
current bullishness might just be a short squeeze or a sudden
increase in price before a sharp fall. With the current
market environment reflecting this volatility, AAVE will have a
hard time securing its June price level bringing in the possibility
of further downturns. Featured image from Zerion, chart from
TradingView
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