Aave gets access to new users through this upgrade, but is it enough

• Aave’s partnership with Lemon App could help expand its user base.
• V3 launch generated interest, but the token’s velocity and network growth declined.

With a new collaboration, over 1.7 million users from Argentina and Brazil could get access to Aave [AAVE] and supply liquidity to the platform. This could help in increasing the declining number of unique users on the platform. However, this new partnership alone may not be enough to fully revive both the protocol and its token.

The highly anticipated V3 launch on the Ethereum mainnet AIP has been created by the community and is now live. V3 is the most significant upgrade to the Aave Protocol, and ETH is Aave’s first and largest market.👻

Read📚, vote🗳️, and discuss here 💬: https://t.co/9lVZseiAHM

— Aave (@AaveAave) January 23, 2023

Read Lido’s [LDO] Price Prediction 2023-2024

According to Messari, the number of unique users on the Aave protocol declined by 25.16% over the last month. Aave’s partnership with Lemon App could help increase this number and incite growth, but it’s important to note that the decline in unique users is likely a symptom of deeper issues within the protocol.

A lot at stake

One possible reason for the current decline in the number of users on the protocol could be the lessening staking rewards, which declined significantly over the last few months, according to Dune Analytics.

Source: Dune Analytics

Aave’s TVL also decreased over the past month, going from $5.4 billion to $3.7 billion. However, the launch of Aave’s V3 on the Ethereum [ETH] mainnet could help improve the protocol’s TVL in the coming future.

Source: Defi Llama

Whales seek AAVE

The launch of V3 was a big development for Aave as the token generated interest from whales. According to Santiment, the percentage of large addresses holding AAVE grew immensely over the last week. This could imply a renewed interest in the protocol, but it’s important to note that this alone may not be enough to drive sustainable growth.

Realistic or not, here’s Aave’s market cap in BTC’s terms

Moreover, the velocity of the token declined, suggesting that AAVE was not being transferred and was instead being held by addresses. However, the token’s network growth decreased, implying a lack of interest from new addresses.

Source: Santiment

Overall, the new partnership with Lemon App could bring in new users to the protocol, but it may not be enough to fully revive the protocol. Aave will need to address the underlying issues causing the decline in unique users, staking rewards, and TVL.

The price of AAVE at the time of writing was $85.94, and it increased by 1.60% in the last 24 hours, according to CoinMarketCap.