“At $288”: How AAVE moved ahead by surging volume, flash loans demand and solid spike in DeFi tokens

Spread the love

Increasing value, demand for flash loans and a solid rally in DeFi tokens have driven AAVE’s price to a new all-time high today.

The Aave (AAVE) market has been on an absolute run for weeks, and today the DeFi token has hit a new all-time high of $288.90.

The decentralized finance protocol is one of the most common on the market and the recent surge in the DeFi sector is one of the driving forces behind the AAVE rally.

AAVE/USDT 4-hour chart. Source: TradingView

At the beginning of 2021, the AAVE price traded at $83 and the latest rebound seems to have improved the protocol’s rising overall value locked, expanded on-site purchasing volume and derivative exchanges, and ongoing growth of Aave’s lending platform and flash loan issuance.

TVL soars to a new high

Data from DeFi Pulse reveals that Aave’s TVL rose from $2.03 billion on Jan. 1 and that the price of Aave’s TVL (BTC) and Ether (ETH) also rose.

RECOMMENDED READ:  What to Expect from Bitcoin After Fed’s Two-Day Policy Meeting
Total value locked on AAVE. Source: DeFi Pulse

Currently, Aave’s TVL is sitting at a fresh all-time high of $3.75 billion, rendering TVL’s second-largest DeFi network after Creator (MKR).

The steady addition of new tokens to the loan and borrowing protocol raises the probability that its TVL will continue to grow and help AAVE maintain its position as one of the top DeFi projects in the cryptocurrency room.

Staking drives demand for AAVE token

AAVE’s trade value also grew in early 2021, rising from $200 million on Jan. 3 to $928 million on Jan. 16.

AAVE price vs. Reported trading volume. Source: TheTIE

As AAVE’s price hit a new peak, its 24-hour trading volume reported a record $1.06 billion. This volume spike is partly motivated by buyers purchasing more tokens for the stakes, with 26.8 percent of the overall supply of AAVE already on the exchange receiving an APY of 6.1 percent.

Flash loans attract investors

Another reason for AAVE’s recent upsurge is the rise of its flash loans.

RECOMMENDED READ:  Monday Madness: 20th July 2020

Flash loans allow cryptocurrency investors to collate their portfolios to finance other investments or new purchases of cryptocurrency. The loans also allow borrowers to use the value of their tokens without the need to sell them and to establish a taxable case.

Since the introduction of flash loans less than 12 months ago, more than $1.7 billion has been released and this amount is projected to rise as the crypto bull market continues.

Total flash loan issuance to date on AAVE. Source: Messari

As can be seen in the map above, the dominant token demanded for flash loans is the DAI stablecoin, followed by the USDC and the ETH. Messari data reveals that Aave provided $25 million in loans in the first half of 2020, $500 million in Q3, and almost $1 billion in Q4, including $450 million in December.

The extension of the Flash Loan concept is likely to draw more users to Aave, particularly when it can be used for arbitration between DEXs, collateral exchanges, self-liquidation and a number of other applications in the DeFi market.

RECOMMENDED READ:  Chinese Central Bank Partnering Up With Top Companies To Test CBDC


 257 Interactions,  4 today

Here’s how miners determine your Bitcoin portfolio’s returns.

Miner trading flows signaled shifts in the price rally of Bitcoin in the current market cycle and the recent bull Read more

New data reveals why those that purchased in Bitcoin in 2017 are the strongest HODLers in 2021

People who bought Bitcoin to become the strongest HODLers in 2017, new data reveals. Investors who started their Bitcoin journey Read more

Upcoming key support for Bitcoin and what you need to know

Bitcoin is currently trading at $50406, and despite the dramatic decline from ATH to $58330, the new price level is Read more

Why Hoskinson says Polkadot, Cardano and Ethereum can all coexist

According to Cardano Creator Charles Hoskinson, there is room on the market for more than one smart contract network. In Read more

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

%d bloggers like this: