Popular decentralized finance (DeFi) protocol Aave has launched its third iteration, which aims to improve financial efficiency, security, and decentralization, the project said on Twitter on 16 March.
According to the announcement, Aave v3 has been deployed on a number of blockchain networks — including Polygon, Arbitrum, Avalanche, Fantom, Harmony, and Optimism — with the Ethereum deployment being left to a future vote. The v3 proposal was first published and put to a vote in early November, and had passed unanimously with 2,911 community members voting for it. Sandeep Nailwal, co-founder of Polygon, said in a statement:
“Aave V3 is poised to accelerate the growth of DeFi with its fully revamped user experience. This is a huge milestone for one of the most popular liquidity protocols in DeFi and furthers our mission to bring DeFi to the next hundreds of millions of people.”
The v3 upgrade features a range of new functionalities and mechanisms that were designed to improve user experience, risk management, and capital efficiency. Amongst them are a cross-chain asset functionality, community contribution tool, high-efficiency mode, gas optimization model that will reduce fees by 20%-25%, and others. The v3 platform will also feature a number of decentralized application (dApp) integrations, including Instadapp, Debank, 1Inch, Paraswap, Zapper, DeFisaver, and more.
One of the most anticipated features to arrive with v3 is the cross-chain “portals”, which will allowing assets to seamlessly flow between Aave V3 markets over different networks. The “high efficiency mode” will allow users to leverage extremely high loan-to-value ratios as long as the loans are in the same asset as the collateral. Last but not least is the “isolated markets” feature, which will allow the Aave governance to more easily list assets as collateral, though with a limited utility.