AAVE token price jumped by nearly 15% shortly after the project announced that Aave V2 is live on the protocol’s mainnet
Less than a year after the release of mainnet version one, popular DeFi project Aave has rolled out a second version with some network upgrades. AAVE price has increased by almost 15% shortly after the project announced that Aave V2 is working on the mainnet of the protocol.
AAVE/USDT 4-hour chart | Source: TradingView
AAVE price reacted to a sudden 15% price spike within hours when the Aave Mainnet V2 was up and running
The decentralized lending protocol allowing users to lend, borrow and earn interest on various cryptocurrency assets launched its V1 mainnet at the start of 2020. By being an active part of the mid-2020 DeFi boom, the protocol surged to a market size of over $ 1 billion.
The team announced the release of the V2 mainnet yesterday with several network upgrades, including an improvement of the first undercollateralized loan option in the space – Aave’s Flash Loans.
An update of the yield and collateral swap will enable users to trade their deposited assets, across all currencies supported in the Aave protocol, even when they are being used as collateral. The company believes that this option will help customers avoid liquidations.
Aave has also simplified the repayments. If users wanted to use their collateral to repay a loan in the V1, they had to withdraw it, use it to buy the borrowed asset, and finally repay the debt and unlock the deposited collateral. This four-step transaction process has been replaced by a new feature allowing users to close their loan positions by paying directly with the collateral.
Until the liquidity transition to V2, users can use the Flash Loan-powered migration tool to execute the conversion without having to close V1 loan positions. The tool will be coming soon.
The protocol’s native cryptocurrency underwent a significant change earlier this year. The LEND token was previously renamed to AAVE, and it went through the 100: 1 token split process.
AAVE price has increased rapidly since the announcement of the V2 mainnet yesterday. AAVE was trading at around $ 86.49 before exploding close to 15% to a daily high of $ 95. However, volatility continued in the following hours and the digital asset fell back to the level approximately like yesterday.
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