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As Ethereum reached new peaks, the overall valuation trapped in various DeFi networks surpassed $10 billion, propelling MKR, AAVE, and COMP to new highs.
Analyzing lending platform behaviour may often be seen as a barometer for calculating cryptocurrency market sentiment, as a higher number of collateral-backed loans can indicate that traders are willing to trade an increasing market.
The overall value locked on Maker (MKR), Aave (AAVE), and Compound (COMP) reached new highs in April, accompanied by increasing token prices and trading volumes.
All three ventures are built on the Ethereum (ETH) network and have gained from the increasing price of ETH as well as a recent decrease in the average gas charge, which has resulted in increased consumer interaction with decentralised finance (DeFi).
Maker’s price has risen the most in April as a result of a number of reasons, including an update to its liquidation engine and the potential extension of its permitted collateral list.
The DAI stablecoin was generated by the Maker algorithm, and its circulating supply has reached a record peak of $3.569 billion tokens.
Data from DappRadar shows that the total value locked (TVL) on the Maker platform has climbed higher throughout the month of April and now stands at $11.09 billion, making it the number one ranked Ethereum-based DeFi platform in terms of TVL.
With organisations increasingly interested in the cryptocurrency field and the expanding Ethereum network, the MakerDAO community and its DAI stablecoin could see more gains in users and TVL as one of the space’s more developed and long-lasting DeFi protocols.
The AAVE community really took off in the middle of April, when the project started on the Polygon network to help scale the protocol while staying on the Ethereum network.
The Polygon-based AAVE protocol surpassed $1 billion in liquidity within 10 days of its announcement, indicating that it was well received.
A rise in the price of Polygon and the rapid expansion of its QuickSwap DEX coincided with a significant increase in the AAVE protocol’s TVL, which now stands at $10.56 billion, according to DappRadar numbers.
The rapid rise in TVL, which started on April 25, coincided with a 55 percent rise in the price of AAVE, which rose from a low of $315 to a peak of $534 on May 3. The migration of AAVE to the Polygon network, as well as the improved scalability it provides, is drawing new users and driving the token price to new highs.
Compound price whipsawed in both directions in April but that didn’t prevent the protocol from reaching a new all-time high.
Data from TradingView shows that after bouncing off a low near $430 in April, the price of COMP rallied 104% to set a new record high at $879 on May 2.
The main driving force behind excitement in the community has been a series of governance votes as well as the approval for the second batch of development grant recipients.
According to DappRadar numbers, the TVL on the Compound protocol actually exceeded the $11 billion level in mid-April until a decrease in prices triggered a drop in rates, resulting in a rapid decline in the valuation of assets locked on the network.
Now that the markets seem to be waking up, with Ethereum nearing a new all-time high and Bitcoin (BTC) attempting a breakout beyond the $58,000 range, the TVL and price for COMP could resume their upward trajectory.