Aave reaps benefits from Ethereum, but for how long will this last?

• Aave V3 revenue was boosted by Ethereum network’s contribution.
• Interestingly, Aave’s migration tool and upcoming stablecoin launch show potential for growth.

Aave recently launched its v3 on the Ethereum network and the results were quite positive in the short term.

This launch provided an immense uplift to Aave’s revenue and affected the v3 protocol positively.

Source: Messari

Well, the key figures emphasize the impact Ethereum had on the revenue generated from V3. Consider this- Aave had average daily earnings of $304 between 1 February and 6 February. Thus, making the protocol earned the third largest source of daily revenue after Avalanche ($1,907) and Polygon ($540).

On the other hand, Arbitrum and Optimism had lower earnings of $180 and $148 respectively. During the first week of February, Ethereum contributed 11% of the total V3 revenue, and it is projected to surpass both Avalanche and Polygon in the near future.

This shows the potential of Ethereum to have a significant impact on Aave’s revenue and the overall success of the V3 protocol.

Read Aave’s Price Prediction 2023-2024

The Aave plot thickens

Along with the launch of Ethereum, Aave also introduced a migration tool during this period. This tool allowed users to move their funds from Aave’s V2 to its v3 protocol with ease.

The migration tool played a significant role in the growth of Aave’s revenue, as it gave users the opportunity to upgrade to the newest version of the protocol and access its latest features.

The launch of the migration tool was a strategic move by Aave, as it helped the network to attract new users and retain existing ones.

Another way that Aave could generate interest in its protocol is through the upcoming launch of its stablecoin, GHO.

The launch of GHO could bring in a new group of users and help to further drive the growth of Aave’s revenue. It could also provide Aave with a unique advantage in the market, and help it to stand out from its competitors.

Notably, during this period of upgrades, Aave’s TVL also surged. According to DeFILlama, it increased by 43% over the last month. This growth in TVL highlights the popularity of Aave’s V3 protocol and the confidence that users have in the platform.

However, the decline in the number of Aave wallets on Polygon and Optimism could be a concerning case since it could negatively impact the protocol.

Source: Dune Analytics

Impact on the token

Although the protocol witnessed some positivity in terms of improvement, the same couldn’t be said about the Aave token.

The velocity of the token has halted, indicating that the frequency of trades involving Aave declined.

Additionally, new addresses have also started to lose interest in Aave, as network growth took a hit. This could be a result of a lack of interest in the protocol’s offerings.

How much are 1,10,100 Aave worth today?

Despite these challenges, whale interest in the token has surged. This could be a result of Aave’s potential to offer high returns on investment.

Whales tend to look for opportunities to invest in tokens with high potential for growth, and the recent developments in Aave could have piqued their interest.

Source: Santiment

That said, it remains to be seen how these factors impact Aave in the long run.