Aave DAO has initiated the voting process for a proposal to deploy Aave V3 on the Ethereum mainnet. As revealed, the voting process is expected to end on January 26, 2023. As part of the proposal, the community intended to list WBTC, WETH, USDC, LINK, AAVE, DAI and wstETH with the latest deployment.
Furthermore, the Aave community initiated the proposal in an attempt to advance its protocol. More so, the development emanated due to the community’s decision to deploy a new V3 as against the upgrading of the V2 pool. Worth noting that despite the deployment of AAVE V3 on different networks, the Ethereum pool still ran the V2. According to the team, the latest development will aid compatibility with V3 pools, eliminating network complexity.
Meanwhile, the V3 is designed to provide innovative DeFi services. Through the latest developemt, the V3 will offer capital efficiency, security, and cross-chain functionality. Also, the latest verison is designed to facilitate good decentralization across the protocol. The AAVE V3 comes with new features like Isolation and High-Efficiency Mode.
Side notes about Aave
Aave is projecting itself as a relaible lending protocol supported by lending pools. Through its Flashloan feature, the platform provides loans for investors without requiring collateral. Network participants of the platform are depositors, borrowers and liquidators.
Lenders earn interest by depositing digital assets into liquidity pools on the platform. Through the governance coin of the protocol, $AAVE, its holders are bound to enjoy discounted fees on the platform. According to CoinCodex, $AAVE presently trades at $87.84.
Regulators growing concern about DeFi loan platforms
According to a report by Reuters, the International Organization for Securities Commission (IOSCO) has raised concerns about the regulation of DeFi platforms. The body which consist of regularors around the globe cited how DeFi loan platforms like Aave exposes investors to risks. Furthermore, IOSCO argued that these platforms allow users to lend, and borrow digital assets, thus bypassing the traditional gatekeepers of finance such as banks and exchanges.
Likewise, the body of global regulator faulted that most DeFi lending platform doesn’t provide enough information about their services. The body posited that the decentralization of these platforms is a premise to question their dependability.
Despite questions about these platforms, investors still turn to them as a means of acquiring loans and earning passively. Presently, the Total Value Locked (TVL) on DeFi platforms amounts to $47.08 billion, with AAVE contributing about $4.7 billion to the figure.