Super DeFi money market protocol Aave is having a wild run with its TVL exceeding $20 billion once again after deploying on Polygon barely six weeks ago.
Aave’s growth in TVL comes amid the crypto market crash of May that saw more than half of the DeFi sector value wiped out. Aave’s website shows that its V2 holds $12.6 billion in total assets locked while Polygon houses $7.8 billion of assets locked on Aave.
Data from DeFi Pulse shows that Aave is currently the largest DeFi protocol maintaining a clear dominance of 15.26% with at least $108 billion locked in all the DeFi protocols combined. Aave’s run on a Layer 2 has sparked off industry-wide interest with many of the DeFi protocols now considering deploying on a Layer 2 to help with scaling and overall improvement of DeFi user experience.
With Aave as the current market leader of other DeFi platforms, data shows Aave userbase is beating both and Maker and Compound who were the original frontrunners of the DeFi space. According to data from Dune Analytics shared by a Twitter user, Aave has a 44% unique user base signalling a possible spike in retail entrants on the lending platform. Maker and Compound displayed 29.8% and 26.3% respectively. Not only did Aave’s size of unique users increase within a short period of time, but it is also aggressively capturing almost half of DeFi’s lending market share in terms of its userbase.
DeFi experts such as Aave’s Marc Zeller in March wrote a piece wherein he predicted that DeFi will not live and thrive on a single chain but on multichain. Weeks after his piece and the deployment of Aave on Polygon, a multichain network looking to help scale baselayer Ethereum, Aave would quickly steal market share from other DeFi platforms especially with BSC’s wild chase of Ethereum platforms. Anthony Sassano, founder of Daily GWEI and a strong ETH supporter said
“I think that the [Ethereum Virtual Machine (EVM)] has already won, I think the EVM is going to be the winner for the long term, and there is going to be a point where it's basically a handful [...] of different chains and L2s.”
Since Uniswap, another DeFi protocol (a DEX) announced its support of Arbitrum Layer 2 solution, others have joined the race to quickly implement Arbitrum in a bid to seize DeFi’s growing market share.
Aave which rebranded from ETHLend, an early iteration of its platform and a peer-to-peer lending protocol remains one of the top gainers in the DeFi sphere and has even gone as far as expanding into the UK last summer, a strategic move for targeting the broader Eurozone in a tightly regulated financial space. UK’s FCA granted it an EMI (Electronic Money Institution) license allowing it to offer services to its citizens.
As of press time, data according to Coinmarketcap shows that AAVE is trading around $388 representing around a 6% price increase within 24 hours and $4.9 billion in market cap.