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Aave (LEND) Price Skyrocketed 20,000% This Year—Is DeFi a Bubble Yet to Burst?

Aave’s bullish momentum has pushed its cryptocurrency LEND towards the top 20 coins by market capitalization after it took the number one spot in the DeFi market.

Aave’s native cryptocurrency, LEND has been seeing massive gains this year, reaching a new all-time high of $0.862 recently. Comparatively, a year ago, LEND’s price was $0.0043, gaining almost 20,000 percent this year.

The open-source and non-custodial lending protocol has recently reached $1.47 billion of crypto assets staked, overtaking MakerDAO, which has $1.45 billion in total value locked (TVL). DeFi Pulse data showed that Aave has reached over $1 billion in cryptocurrencies staked on the platform, accounting for one-seventh of digital assets staked in the DeFi industry.

Decentralized finance (DeFi) money market Aave allows its users to earn interest on crypto and borrow against it, when it introduced credit delegation in July 2020. Users could use their collateral deposited on Aave to delegate their credit line to a trusted third party of their choosing. The user gets a cut of the interest when co-signing a loan to the trusted third party.

Aave’s UK business entity has been granted an Electronic Money Institution (EMI) license on July 7, according to the UK Financial Conduct Authority (FCA). With approval from the FCA, Aave will be able to offer services including issuing digital cash alternatives and providing payment services.

DeFi market bullish, driving Ethereum’s price up

Although Aave has seen its price surge, other smaller DeFi platforms including Serum and YFII-Finance have also seen double-digit gains lately. More than $7 billion in cryptocurrencies have been locked up in DeFi, meaning over 600 percent in the last 3 months.

DeFi has been booming, mostly due to a new concept—yield farming. yEarn Finance’s token grew in value by over 14,000 percent in just one week. The DeFi craze has reminded many investors of the initial coin offering (ICO) boom in 2017, which could also turn into an emerging bubble, about to burst at any moment.

Yield farming is a practice where a DeFi project creates tokens to reward users who provide liquidity, through either borrowing and lending or token exchange. In order for users to provide liquidity, users must put tokens into the project, which are locked up, unable to sell, or trade. As more tokens have been locked up in DeFi to benefit from yield farming, the supply of tokens have also been reduced, driving Ethereum’s price up. Ethereum’s price has seen highs that have not been witnessed since June 2019.

Ethereum and DeFi Tokens Plummet Amid High Selling Pressure

Ethereum recently took a dip, after almost reaching the highs at $390. Ethereum is currently trading at $343, taking an 8.4 percent dive in the past 24 hours. Popular DeFi tokens, including Yearn.finance (YFI), and Uniswap (UNI) have also witnessed strong corrections in the past few days.

The decentralized finance market has previously outperformed Bitcoin (BTC) and Ethereum (ETH) in August, however, DeFi tokens have been plummeting recently. Yearn.finance and Uniswap have both witnessed a 46 to 48 percent drop, after reaching its monthly high.

Uniswap’s UNI token saw a huge price spike from its launch, as major exchanges listed the token, including Coinbase Pro, Binance, and FTX exchange. Shortly after the launch of the UNI token, Ethereum’s transaction fees have also reached new highs. Gas prices were recorded as high as 700 gwei, due to the network congestion faced due to users claiming Uniswap tokens. Average gas prices are around 416 gwei.

The Yearn.finance (YFI) token has previously reached its all-time high of $38,000, before plunging down to $24,200 at press time. The anticipation of a DeFi market correction, due to profit-taking has been expected, however, the Ether is still struggling to gain momentum.

Ethereum usually led altcoin rallies, including DeFi tokens, however, Ether has struggled to maintain its performance compared to Bitcoin. Ether remained below $400, while BTC recently rallied to $11,100 before retracing back to under $11,000.

Ether’s price has declined most likely due to the selling pressure of the DeFi tokens, as the UNI and YFI tokens have suffered a 50 percent correction, most likely due to profit-taking.

Many DeFi tokens have also slid, with Aave’s LEND token, Synthetic Network Token, also seeing drops in their prices in the past few days as selling pressure increased.

However, with the stock markets flooding red, and the US dollar losing its grip against foreign currencies, Ethereum, Bitcoin, and the DeFi market could still see the light of day from the push of the traditional markets.

The stock market faced a sharp sell-off on Monday, led by correcting the hopes and expectations that the economy would be recovering. While the US continues to struggle with the coronavirus pandemic, Europe has also started to see a sharp increase in COVID-19 cases, indicating a second wave.

Stablecoins Hit $20 Billion by Market Cap Milestone, More Investors Favouring Tether as Hedge

Along with the recent DeFi craze, stablecoins have also made incredible crypto gains, achieving a milestone of $20 billion per market capitalization in September.

On the crypto market, this translates to a nearly 300% year-to-date surge for stablecoins.

Why the piqued interest in stablecoins?

Stablecoins are essentially cryptocurrencies that are backed on a one-to-one basis with an asset, such as the US dollar, or another cryptocurrency or commodity. Examples of dollar-backed stablecoins are the Gemini dollar, USD coins, and Tether, with the latter being the biggest stablecoin by market capitalization.

As stablecoins offer less volatility and are more “stable” assets in nature, they are largely preferred by new investors looking to dip their toe into crypto investments.

Stablecoins offer a chance for investors to hedge their funds with less risk and fluctuations as other crypto assets, such as Bitcoin. They seem to be a more attractive option for investors who are looking to diversify their funds amidst the coronavirus pandemic and the global economic uncertainty.

The surge of stablecoins may also be partially due to the emerging interests of crypto investors with the decentralized finance (DeFi) sector. Often, stablecoins are used by DeFi yield farmers to receive crypto funds from various DeFi platforms, such as Uniswap, Aave, and Curve.

Tether stablecoin hits the $15 billion mark

Currently, Tether (USDT), the biggest stablecoin by market capitalization, has also emerged with a record of its own, reaching $15 billion on CoinMarketCap.

There has been an increased demand for dollar-backed cryptos, especially USD-backed Tether, perhaps as a result of Bitcoin – the largest cryptocurrency by market capitalization – undergoing a downtrend earlier this week and most of the crypto market struggling to stay afloat.

With stablecoins such as Tether pegged one-to-one with the USD dollar, new investors might also view USDT as a more familiar alternative to move their securities, as it is backed by US currency, which they are familiar in dealing with.

In periods of economic instability, investors looking for hedges may feel more comfortable starting off with Tether and other stablecoins, as opposed to Bitcoins and other cryptocurrencies which may display higher volatility and increased risk.

US Treasury Department on stablecoins

The Office of the Comptroller of the Currency (OCC) announced earlier this week that national banks and the US Federal Savings Banks authority could hold stablecoin reserves for clients and issuers. In a report outlined by the OCC, a clarification regarding stablecoin regulation was given.

It emphasized that stablecoin activities could be conducted within US national banks, but that they needed to be compliant with anti-money laundering laws and financial laws, such as the Bank Secrecy Act.

Aave (LEND) Is Up By Over 11,000 Percent This Year, DeFi Market Reaches $11 Billion in Total Value Locked

The continuous rise and the unending support for the decentralized finance (DeFi) industry has resulted in a total of $11 billion in total value locked, according to DeFi Pulse. The rise of DeFi has led to many protocols making waves, including Aave’s LEND token.

Aave is an open-source and non-custodial lending protocol, and its native token has currently $1.5 billion in total value locked. Aave ranks the third according to the amount of cryptocurrency locked in the DeFi sector, behind Maker and Uniswap.

The proposal presented by the Aave team for the protocol’s decentralized governance highlighted the need to improve the functionality of the protocol, by aligning the interests of the shareholders’ shared vision. Aave recently announced that its voting process has started on its mainnet, and the community will be able to decide its activation. Aave tweeted:

“Aave Governance is officially on mainnet, giving the decisional power to the community! Now it’s time to vote on the very first Aave Improvement Proposal (AIP) for the token migration from $LEND to $AAVE.”

According to the announcement, the community will get to decide on the deployment of the smart contract, turning the old Aave token (LEND) into the AAVE governance token. The total supply of LEND is estimated to be 1.3 billion, and it will be converted to 13 million AAVE governance tokens. LEND holders, the Aave community will be able to vote and decide on the pace of the migration.

Aave claims that the journey towards decentralization is Aave’s ethos, to empower the decentralized community to make decisions on Aave. Following last week’s crypto market crash, Aave has slightly recovered from last week’s low of $0.44 to $0.55, at press time. Despite last week’s crypto market plunge, the DeFi industry has also defied the odds and has witnessed an additional $1 billion in total value locked (TVL), hinting at more upside potential.

Aave Price Surges 76% in One Week, DeFi Tokens to Move Higher as Institutional Adoption Increases

Aave (AAVE), one of the leading cryptocurrencies in the decentralized finance (DeFi) sector has seen its price reversal surge up to 76 percent in the past week. Among the top 50 cryptocurrencies by market capitalization, Aave has outperformed every other digital asset.

In the past 24 hours, has gained 15 percent in the past 24 hours, trading at $53.18 at press time. The world’s largest cryptocurrency by market capitalization, has gained 3 percent in the past 24 hours, and 12 percent in the past week. Ethereum has also seen a similar trend, gaining 3.3 percent in the past 24 hours, and 14 percent in the past week.

Some analysts believe that the Aave token, (AAVE) could continue on its bullish trend as the futures markets for the cryptocurrency indicates that the token could surge rapidly. An analyst commented, while pointing to the below chart:

“$AAVE short liquidatons about to kick in. Pump it $55.”

Institutional capital in the DeFi market

With the strong surge in AAVE’s price and the uptick of total value locked in the DeFi industry, many have speculated that institutional capital has been slowly being deployed in the market.

While the Bitcoin price has seen a substantial increase in the past few weeks, the DeFi market has also risen. The total value locked in the DeFi industry is $12.43 billion at press time, according to DeFi Pulse.

An analyst at Messari, Mason Nystrom, recently noted that Jump Trading, a Wall Street giant has recently been holding more than $75 million in cryptocurrencies.

Although the company has already been quite active in the crypto industry, Jump Trading is now holding a few digital assets in the DeFi industry, including Compound (COMP), Keep Network (KEEP), HXRO, Numeraire (NMR), Orchid Protocol (OXT), and MakerDAO (MKR). The company has invested the most heavily in Serum.

Has the DeFi industry bottomed yet?

Crypto analyst Qiao Wang recently explained that the bottom of the DeFi market is still yet to come. He said:

“I constantly update my views and unfortunately it looks like there’s going to be more pain in DeFi. Originally I thought we won’t see a 80-90% crash which is typical of alts because of the level of sophistication of DeFi investors but that thesis is being invalidated.”

Aave Launches Upgrade, DeFi Tokens to Gain as Bitcoin Fails to Break $16K

Aave (AAVE) DeFi protocol launched an upgrade on its public testnet today. The decentralized finance lending platform has been evolving and it was announced today that version 2 will now be available on the Kovan testnet.

The upgrade is designed to bring improvements and increased financial incentives to the DeFi platform. A significant upgrade is that transactions that would previously have to be conducted in numerous steps could now be done through one single operation. This will enable DeFi lenders and borrowers to save on network fees and transaction time.

Also, the transition to version 2 will bring liquidity mining to Aave users. With the upgraded testnet, governance features that will be improved include vote delegation and the distribution of governance power between Aave users. Additionally, users will be able to trade with their deposited assets, even if these are recorded as collateral on Aave.

Following the news, AAVE token has fallen back slightly, trading at $58.88 on CoinMarketCap at the time of writing. The token has been recovering from its significant price surge, where it doubled in value and gained by 122% in the past week.

Is it altseason? Bitcoin faces headwind

AAVE is not the only altcoin to have performed bullishly recently. With Ethereum’s high transaction fees and Bitcoin failing to flip $16K to a support level and consolidating around $15,832.40, other DeFi tokens have benefitted from BTC’s lack of momentum.

Yearn.finance (YFI) has recorded gains of 103% from its weekly lows, and Uniswap and Curve tokens have also followed suit with a weekly gain of 67.11% and 66.81%, respectively.

Market experts have speculated that the DeFi boom will continue if Bitcoin fails to break $16,000. More investors will diversify their crypto assets away from Bitcoin and into DeFi protocols to acquire larger returns.

If Bitcoin fails to maintain a price level above $16K, this may result in immense selling pressure from BTC whales, and a prolonged consolidation phase. Crypto analyst Qiao Wang tweeted:

“Several exciting major upgrades on the horizon for DeFi blue chips. In the bear market they are your exit liquidity. In the bull market they are FOMO (fear of missing out) opportunities.”

Here Are the Top Three DeFi Gains of the Week: SUSHI, UNI, and AAVE

The altcoin market has been favorable for the decentralized finance (DeFi) market in the past week, with massive growths seen in many DeFi projects.

With the general growth experienced by the DeFi market, the growth recorded in the past week by SushiSwap (SUSHI), UniSwap (UNI), Aave (AAVE), and Compound (COMP) stand out. The embrace of decentralized finance offerings including decentralized exchange for automated liquidity offered by both SushiSwap and Uniswap is seeing increased patronage.

The same can be said of the lending opportunities offered by both Aave and Compound. The apparent growth of these projects has translated to their respective tokens.

SushiSwap (SUSHI)

SushiSwap is an Automated Money Maker (AMM), or a decentralized exchange that makes use of smart contracts to create markets for any given pair of tokens. SUSHI is the protocol’s native coin and it had previously experienced a major plunge from which it is gradually and currently recovering from.

SUSHI’s price dropped from its all-time high of $11.93 to below $1 following the cash out of SUSHI tokens for Ethereum (ETH) made by the project’s core developer Chef Nomi. Following this scandal, the project’s control was then transferred to Sam Bankman-Fried, the founder of the FTX Derivatives Exchange.

SUSHI tokens appear to be regaining its momentum. It has grown by 93.3% in the past week according to Coingecko. The coin is also up 28.9% in the past 24 hours, and the SUSHI currently trades at $1.17 at the time of writing.

Uniswap (UNI)

Uniswap is one of the first pioneers of the Automated Money Markets (AMMs) and its entrance into the market paved the way for subsequent protocols like SushiSwap. Uniswap has also seen a major price pump in the past seven days with a 67.3% growth of UNI, the protocol’s native token.

The Uniswap market is ever-expanding, thus creating more room for the growth it has recorded so far. The protocol has thousands of trading market pairs which makes it a go-to investment for most traders, particularly those who favor decentralized systems.

Uniswap created the UNI token in September 2020 to serve as the governance token for the protocol. The token currently trades at a price of $4.15 and besides its 67.3% growth in the past one week, the coin has pushed past other coins to rank as the 26th cryptocurrency by market capitalization on CoinMarketCap.

Aave (AAVE)

Aave ranks as the last of the top three DeFi tokens experiencing the most gains in the past week. The coin is currently trading at $70.69 and it is up 57.9% in the past week, 19% in the past 24 hours, and about 2.6% in the past hour, at the time of writing (4:24 PM, Hong Kong Time).

The Aave protocol which lets users take flash loans amongst other loan provisions has grown in popularity since the beginning of the year and more so, with the DeFi surge. The network migrated from its previous network token LEND to its own AAVE tokens, thus transferring governance to the network users.

The migration appears to be fueling the new rally in AAVE tokens as previous LEND holders migrate to the new tokens. Besides the general positive rally, the AAVE token has recorded its all-time high today, pegged at the $70.69 it was trading at.

The momentum being gained by these three tokens as well as other DeFi tokens contributes to the total locked value of $13.7 billion the entire DeFi market has recorded.

Coinbase Lists DeFi Tokens AAVE, BNT, and SNX as Warning of US Crypto Wallet Regulation Looms

2020 has seen the growth and the emergence of the decentralized finance (DeFi) sector and many crypto exchanges have onboarded the craze to remain relevant.

Recently, US-based crypto exchange Coinbase has decided to add more cryptocurrencies to its platform for trade, in particular DeFi tokens such as Filecoin (FIL), Wrapped Bitcoin (WBTC), UMA (UMA), Uniswap (UNI), yearn.finance (YFI), and more.

The most recent additions include Aave (AAVE), Bancor (BNT), and Synthetix Network (SNX). Per Coinbase’s recent announcement, these will be available for trade on Coinbase Pro, which is the advanced order platform of Coinbase. Coinbase Pro proudly announced:

“Starting today, inbound transfers for AAVE, BNT, and SNX are now available in the regions where trading is supported. Traders cannot place orders and no orders will be filled. Trading will begin on or after 9AM PT on Tuesday, December 15, if liquidity conditions are met.”

Simply put, the cryptocurrency exchange is still working on providing a sufficient supply of AAVE, BNT, and SNX, which are all Ethereum-powered DeFi tokens that will inevitably be paired with USD for trade. Other pairings are also available on Coinbase Pro, as the cryptocurrency exchange has gladly welcomed the DeFi craze to accommodate its traders.

Following the announcement, AAVE, BNT, and SNX all experienced temporary surges, with AAVE rallying to highs of $92 from $86. As for SNX and BNT, in the last 24 hours, both added 10% and 24% respectively to their value.

The DeFi craze this year has been all the talks of the cryptocurrency industry this year, but the decentralized finance trend may come to a halt with the impending US cryptocurrency regulations.

Crypto to be regulated in the US, but not in favor of DeFi

According to Coinbase CEO Brian Armstrong, there may be moves from exiting President Donald Trump to regulate self-custodial cryptocurrency wallets. If Trump acts on this and enforces regulations for self-hosted crypto wallets, this may greatly impact the DeFi industry, as many tokens are kept in a non-custodial wallet. Armstrong previously explained,

“This additional friction would kill many of the emerging use cases for crypto. Crypto is not just money – it is digitizing every type of asset […] Given these barriers, we’re likely to see fewer transactions from crypto financial institutions to self-hosted wallets.”

In addition to affecting the DeFi craze and halting its widespread innovation in the US, this may result in the country lagging further behind its counterparts in terms of financial and technological innovation.

Whether or not the crypto wallet regulation will be passed before Trump’s end of term still remains in question. However, if that were to happen, crypto innovation in the US may be hindered, as feared by many in the industry who have expressed these concerns, notably Ripple fintech firm.

SNX and AAVE Prices Remain Stable Amid Bitcoin Driven Market Dip

The general cryptocurrency market is back on its forte of trailing whatever retracement Bitcoin (BTC) ushers into the market. After recording a slight bullish correction yesterday, a move that suggested it is yet to amaze the market bulls, Bitcoin saw a significant push back from the $35,000 price mark and it is currently seeing a 2.46% drop at the time of writing according to CoinMarketCap.

As a deviation from the general trend, Decentralized Finance (DeFi) tokens including the Synthetix Network Token (SNX), and Aave (AAVE) have maintained bullish stability irrespective of the current price momentum of Bitcoin.

The Anticipated Roadmap of The Synthetix Network

The Synthetix Network Token (SNX) is seeing a bullish price movement today and this growth can be attributed in part to the anticipated 2021 roadmap released by the project developers. One of the highlights of the roadmaps is to migrate to ‘Optimistic Ethereum,’ a layer 2 scaling solution that will position the network to help address the soaring network transaction fees as well as the scalability issues. The team noted in a blog post:

“The transition to Optimistic Ethereum, a layer two scaling solution, will alleviate many of the issues experienced in 2020. There are two primary advantages to this transition: lower gas costs and higher throughput. Lower gas costs are good for all users and make the system more efficient. Higher throughput will enable us in partnership with Chainlink to reduce oracle latency, allowing for leverage via Synthetic Futures as well as a number of other protocol improvements.”

With the network improvements set to be rolled out at different times of this year, the market bulls appear to be betting big on the coin in advance. SNX is up 8.4% to $15.88 and by 27% in the past week according to data from Coingecko.

The OCC Boost

The performance of Aave, as well as other DeFi tokens, have also maintained a strong bullish positioning following the published OpEd by Brian Brooks, the Comptroller of The Currency wherein he mulled the possibility of providing banking charters for Decentralized Finance projects.

The OCC boss said in the publication:

“Could the OCC even grant a national bank charter to open-source software that manages deposit-taking, lending, or payments, if it doesn’t have officers or directors? Not yet. Under current law, drawn up on the assumptions of the early 20th century, charters can only be issued to human beings. But those antiquated rules should be revisited, just as regulations that still mandate the use of fax machines should be.”

This possibility of getting more support from the OCC remains one major reason why the DeFi markets appear stable despite the ongoing Bitcoin and crypto market price correction. At the time of writing, Aave has amassed 4% in the past hour and 8.5% in the past 24 hours.

Altcoin Price Analysis: XRP and AAVE

It is the beginning of a new week and the cryptocurrency market is in a raging swing as volatility continues to show heightened activity among buyers and sellers in the market. New milestones have been reached lately as the crypto industry’s market capitalization has once again breached the $1 trillion milestone.

While cryptocurrencies each have their own peculiar price action in today’s market, this piece highlights the short-term price momentum of Ripple’s XRP and decentralized finance (DeFi) protocol AAVE.

XRP Price Analysis

XRP is still by far one of the most underperforming cryptocurrencies in the top 10 by market capitalization. The woes the coin is battling are due to the SEC lawsuit filed against Ripple Labs, and the latest development to the case is the halting of XRP trading on Kraken exchange, as reported by Blockchain.News.

The XRP cryptocurrency’s downfall has led the coin to lose as much as 52.4% of its value in the past month and has made Polkadot (DOT) surpass XRP to rank the fourth-largest cryptocurrency by market cap today. Despite these bearish developments surrounding XRP, the token has managed to gain 1.9% in the past 24 hours to trade at $0.28. A major consideration is whether XRP can overcome its challenges to push above the $0.3 resistance level in the short-term.

A look at the XRP/USD chart on TradingView shows that the coin has a below-average Relative Strength Index (RSI) of 45.73, which largely indicates that the bears may be in charge, having a more temporary overweight on the price momentum. The Fisher Transform curve is also below the Zero mark indicating a bear market. The possibility of XRP breaking through the $0.30 resistance mark is low as the short-term moving average is also not showing any promising signs.

AAVE Price Analysis

Aave is a promising DeFi protocol whose loan offering has gained enough traction to earn it the second spot, trailing behind Maker (MKR) in terms of total value locked (TVL) in the DeFi sector. The growing strides of the protocol have also resulted in an increase in its token price, boosted by the entire bullish market.

Aave has surged by more than 113% in the past 30 days, 50.6% in the past week, and 6.4% in the past 24 hours. Aave fundamentals support this current bullish price and the technical indicators also backs this growth.

In direct contrast to XRP, Aave has a more bullish RSI pegged at 59.92%. Even though this is not incredibly stellar, the positively trending Fisher Transform consolidates this bullish growth and the short-term moving average further confirms this short-term growth trend.

Should the technicals be correct, Aave’s price is bound to form strong support at $200 while aiming to burst through the $220 resistance in the upcoming days.