Aave, the decentralised finance (DeFi) protocol, is set to make its debut on Base, Coinbase’s new layer 2 of Ethereum, after winning a governance vote with 100% in favour. This integration should pave the way for new opportunities for the 2 platforms in the DeFi sector.
Aave is coming soon to Base
The decentralised finance (DeFi) protocol Aave will make its integration this week on Base, the layer 2 of Ethereum (ETH) recently launched by Coinbase, following a governance vote. After 3 days of voting, the proposal was unanimously accepted on Aave’s decentralised autonomous organisation (DAO), garnering 100% of votes in favour.
Stani Kulechov, the founder of Aave, reacted to the news on X (formerly Twitter):
Next week will continue being based pic.twitter.com/hAbSjk7Fnl
– Stani.lens (@StaniKulechov) August 20, 2023
According to the initial proposal, this new deployment (exclusive to Aave V3) should allow the DeFi protocol to take advantage of Base’s user base, while allowing Base to take advantage of Aave’s opportunities, which include cryptocurrency lending and the development of yield strategies, among others:
” This allows Aave to leverage Coinbase’s integrations, fiat currency on-ramps and access to over 110 million users and over $80 billion in assets in the Coinbase ecosystem. For Base, the deployment of the Aave V3 codebase expands the on-chain experience by enabling a diversity of DeFi platforms and introducing flagship and trusted lending protocols. “
When deployed, Aave V3 will list wETH, cbETH and USDbC on Base according to parameters recommended by Gauntlet and ChaosLabs.
Benefiting from Coinbase’s aura, Base already boasts promising statistics: 14.4 million transactions, more than 218,000 smart contracts, 3 million blocks produced, and this for around 100,000 wallets active on a daily basis. With more than $239 million in total locked value (TVL), Base is in 5th place on the Ethereum layer 2 podium, even though its mainnet was only opened to the general public on 10 August.
In other words, this is a strategic positioning for Aave in an environment that is still completely new. The lending protocol will sit alongside DeFi applications such as Beefy, SushiSwap and Compound to offer Base users a new range of tools.
This new market should provide a breath of fresh air for Aave after the protocol lost 19% of its total locked value over the last 30 days, partly as a result of the attack on Curve, although this mainly affected Aave V2.
The price of the AAVE token has suffered particularly badly over the past 30 days, falling by 24%. It currently trades at $55.5 with a market capitalisation of $63.6 million, placing it 47th among cryptocurrencies on this metric.