Aave, one of the largest decentralized finance (DeFi) lending platforms, has announced the launch of the third iteration of its protocol, dubbed Aave ‘V3.’ The DeFi lending giants aim to expand their reach in the industry with the launch.
The Features of Aave V3
According to Aave, Version 3 is the most powerful iteration of the Aave protocol since its launch. A key feature of the upgrade is the introduction of cross-chain lending to Aave.
Aave announced the launch of its services across six different blockchains – Polygon, Fantom, Avalanche, Arbitrum, Optimism, and Harmony. A seventh chain – the Ethereum mainnet – is expected, but a date for this has yet to be provided.
Via its compatibility with different blockchains, users can now seamlessly transfer and borrow assets from one network to another on Aave.
Aave has additionally introduced an “isolation mode” in its new protocol to enhance security. Aave V3 also promises higher efficiency that enables users to access even higher borrowing levels.
In addition to introducing cross-chain asset flows, Version 3 brings a 20-25% reduction in transaction costs through gas optimization.
Aave, Expanding Its DeFi Services
Aave has also fully redesigned & refreshed the Aave app. Aave notes that it has revamped its app to allow users to “access simplified transaction flows, enjoy faster load times, & gain enhanced visibility into their holdings.”
Along with the improvements to its protocol, Aave announced that it hopes to use V3 as incentive for new and existing Aave community members to “participate in the Aave DAO, which will continue to shape the future of DeFi.”
On the Flipside
- Aave’s native token (AAVE) has been unable to keep up with the growth of the protocol, having fallen by 80% since May 2021.
Why You Should Care
The integration of cross-chain lending retools Aave for a much larger market opportunity as it aims to push decentralized lending into the mainstream.