Aave Protocol V3 deploys on Ethereum offering new risk mitigation features
Aave deploys V3 on Ethereum after 10 months of testing on other networks.
Aave Protocol V3 is now live on the Ethereum market, the most exciting feature of V3 is its flexible design which enables a variety of new risk mitigation features, and its improved capital efficiency and decentralized liquidity all while reducing gas costs.
The third version of the crypto lending app Aave has currently deployed on Ethereum for the first time.
According to the Aave team Twitter post-Aave V3 was released in March 2022 and it was deployed on multiple Ethereum virtual machine (EVM) compatible blockchains shortly, ethereum users only had access to the app's older V2 version.
Aave Protocol V3 is now live on the Ethereum market— Aave (@AaveAave) January 27, 2023
”The most exciting aspect of V3 is its flexible design, which enables a variety of new risk mitigation features, and its improved capital efficiency & decentralized liquidity – all while reducing gas costs.” @StaniKulechov pic.twitter.com/QsSnnlhEMr
Aave V3 includes a few features intended to help users save on fees and maximize the efficiency of users' capital. The high-efficiency mode allows the borrower to avoid some of the app's more stringent risk parameters it borrowers collateral is highly correlated with the asset being borrowed developers said that may be useful for borrowers of stablecoins or liquid staking derivatives.
The isolation feature allows certain riskier assets to be used as collateral as long as they have their debt ceiling and are only used to borrow stablecoin under the previous version. there was no way to limit what type of asset could be borrowed given a certain type of collateral.
Aave V3 protocol also includes a gas optimization algorithm that the developers say will reduce gas fees by 20% to 25%
The code V3 was published on Nov 21 the Aave DAO approved an initial vote to deploy the new version V3 was deployed to Avalanche (AVAX), Arbitrum (ARB), Optimism (OP), and Polygon (MATIC).
The initial launch only has seven coins. the vote to launch began on Jan 23 after supporters won the vote the execution of the proposal was able to move forward on Jan 27 less than 0.01% of DAO members voted against the proposal.