AAVE Price on the Rise Amid Positive Market Sentiment
Aave’s native currency, AAVE, shows firm price action as of July 12. It’s experiencing a notable rise, up 56% from its lows in June 2023, shaking off the weakness after the significant price pump late in the same month. The AAVE price surge is largely attributed to an overall positive sentiment in the crypto market and bullish steps taken by the Aave DAO, a decentralized autonomous organization (DAO) governing the multi-protocol Aave lending protocol.
Strategic Implementation of GHO on Ethereum
Adding to the bullish momentum, strategic implementations have significantly contributed to the strengthening of AAVE. The Aave community is currently voting on a proposal to allow the deployment of GHO on the Ethereum mainnet. As of now, over 99% of the community is in favor of this deployment.
Once activated, users of Aave v3 will be able to mint GHO using their ETH as collateral. The interest fee payments will then be directed to AaveDAO as revenue, promising a significant revenue boost.
Aave DAO Acquires Additional Balancer LP Tokens
In June, Aave DAO made a pivotal move by approving a $2 million swap to acquire additional BAL-WETH liquidity provider (LP) tokens from Balancer, a decentralized exchange. The swap was executed on CowSwap’s Milkman protocol’s rail to ensure a smooth transaction, protected against miner extractable value (MEV) exploits, and executed with minimal slippage.
As a result, Aave DAO received BAL-WETH assets which were converted to escrowed BAL tokens (veBAL). This strategic move is anticipated to enhance Aave’s role in the DeFi landscape, attracting more liquidity, especially to Aave’s pools in Balancer.
Increased Revenue Expected with Higher Liquidity
As of July 12, Aave managed assets worth $5.9 billion, measured by total value locked (TVL), according to DeFiLlama. The majority of these assets were Ethereum (ETH) and Ethereum-based tokens. The rest included assets from blockchains compatible with the Ethereum Virtual Machine (EVM), such as Harmony.
With more liquidity, Aave stands to earn more revenue. Over the past few months, AaveDAO’s revenue has seen a consistent rise, averaging below $30k daily. However, with the strategic implementations and anticipated surge in liquidity, Aave DAO expects a further boost in revenues in the second half of 2023.
