Aave: DeFi protocol launches version 2 on a public testnet

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Aave v2 was released on the Kovan test network.

Many much anticipated improvements and features have been added.

The prices of AAVE tokens doubled last week.

The DeFi Aave lending platform is evolving with the launch of its long-awaited v2 upgrade on a public test network. The price of tokens was down on November 12, but has been in a recovery phase since last week with growth of more than double its price.

The next iteration of the decentralized Aave flash lending and borrowing protocol is one more step for the project, with the announcement on November 11 of the launch of public testnet for version 2.

The migration to v2 was initially announced in mid-August, at the height of the Bitcoin Union boom. He promised a whole series of improvements and financial incentives. The recent announcement brings these features closer to their realization with the launch of a public test network.

What’s under the hood?

An important change will be the possibility of repaying part of the guarantee without having to make multiple transactions. Consolidating this transaction into one transaction will save network costs, time and effort.

The tokenization of debt positions will facilitate the delegation of native credit under the Aave protocol . This will allow more efficient management of positions for lenders and borrowers. There will be stable borrowing rates and fixed interest rates to allow for greater predictability and to avoid losses due to market volatility.

The gas costs were the scourge sector this year and Aave brought several improvements to limit them. V2 aTokens will integrate EIP 2612 for Eth’s non-gas approvals, with the ultimate goal of operating on Layer 2. There are also a number of gas optimizations that further reduce the burden of network charges.

Margin borrowing will be permitted to allow users to directly take leveraged long and short positions in any of the supported assets without the use of third party services.

There are a number of governance updates

V2 will be the start of what is commonly referred to as “Liquidity Mining” for users of the Aave protocol.

The announcement added that the code is currently undergoing four audits and one formal verification, the results of which will be released ahead of the mainnet launch.

Reaction of the AAVE course

Aave’s native token, which migrated in late September, has actually taken a small dip since yesterday’s opening at $ 67, down 14% to $ 57.

AAVE has been in full swing with its DeFi counterparts since last week, adding 160% in a rise of $ 26 to hit $ 67 on November 11.

The Total Locked- In Value (TVL) on the protocol is down from an all-time high of $ 1.7 billion on August 31. It fell below the $ 1 billion mark in early November but, alongside token prices, it has since recovered to the current level of $ 1.16 billion. This makes it the fifth largest DeFi protocol by TVL measurement.