AAVE hits new all time high of $123 as TVL reaches $2.64Bn

The price of AAVE surged 40% since the start of the new year following a Coinbase listing last month and the Aave Protocol V2 launch

AAVE yesterday hit an all time high of $123.96, following a surge of 40% since the start of 2021. This represents huge gains since this time last year when its price was hovering around just $2.

Aave also recently overtaken Uniswap to become the second-ranked decentralised finance (DeFi) platform with $2.64 billion in total value locked (TVL), according to data from DeFi Pulse. In fact, 2020 was a great year for the whole DeFi sector, growing from around $600m in TVL last January to end the year at over $14 billion.

AAVE’s recent price surge could be due in part to the ‘Coinbase effect’ – the exchange listed AAVE on 15 December, following AAVE listings on several other exchanges including Binance, Gemini and Kraken.

Another factor could be the launch of the Aave Protocol V2 on its mainnet last month. V2 offered many new features such as the ability to trade assets while they are being used as collateral and swap them to get the best yields on the market. V2 also saw Aave upgrade their Flash Loans, tokenise debt and introduce gas optimisations, which can lower the cost of protocol transactions on Ethereum by up to 50%.

Other milestones for Aave over the last year include becoming more decentralised by handing over the admin keys to the community and surpassing $1 billion in Flash Loans volume last month.

Many continue to be bullish on Aave. Lito Coen, creator of crypto onboarding website Cryptotesters, tweeted yesterday: “My favourite defi protocol is @AaveAave. Imo there is no way that it won’t 10x in the next 2-3 years. It’s the clear category leader in lending, which in return is the fastest growing sector in DeFi and the one i’m most certain will prevail.”

As for what’s next for Aave, they have teamed up with ETHGlobal to host the MarketMake hackathon which kicks off next Friday, and there is also the launch of the Aavegotchi NFT game to look forward to. This was originally due to take place on 4 January, but insanely high gas costs and extreme volatility on the Ethereum network led Aavegotchi to delay their mainnet launch. However, the team provided some hope when they tweeted this week that the game would be moving to Matic Network.