The new procedures included the requirement that all future code changes be approved by the DAO

According to a tweet thread published on January 27 by the Aave team, the third edition of the cryptocurrency lending app Aave has now been deployed to Ethereum for the very first time. ” Aave V3 ” was first made available to the public in March 2022, and immediately after its launch, it was installed on a number of blockchains that were compatible with Ethereum Virtual Machine (EVM).

Users of Ethereum could only utilise the more outdated “V2” version of the application up until now.

Aave V3 has a number of features that are designed to assist users in reducing the amount of money spent on fees and increasing the effectiveness of their capital.

For instance, the High Efficiency option gives the borrower the opportunity to sidestep some of the app’s more severe risk requirements. This is possible in the event that the borrower’s collateral has a strong correlation with the asset that is being borrowed.

The developers believe that borrowers of stablecoins or holders of liquid staking derivatives may find this feature valuable.

In addition, the “isolation” feature enables some risky assets to be used as collateral, provided that they have their own debt cap and are only used to borrow stablecoins. This is possible since certain assets can only be used to borrow stablecoins.

In the prior iteration, there was no provision for putting restrictions on the kinds of assets that may be used as collateral for a loan of a certain kind.

Because of this, coins with a lesser market capitalization and less liquidity were often unable to be utilised as security.

The creators claim that the gas optimization algorithm that is included in V3 will result in a 20–25% reduction in the cost of gas.

In November of 2021, the code for V3 was made publically available.

In March of 2022, the Aave DAO gave its blessing to move forward with the deployment of the new version after an initial vote.

The V3 system was rolled out to Avalanche (AVAX), Arbitrum (ARB), Optimism (OP), and Polygon over the course of the subsequent few months (MATIC).

Despite this, the Ethereum implementation of Aave has traditionally been the most liquid, but V3 was not available on this implementation until recently.

The official proposal states that there will be a total of seven coins available during the launch phase.

The vote to launch was held beginning on January 23 and continuing for a total of two days.

Following the success of the proponents in the vote, the implementation of the idea was finally able to get off the ground on January 27.

The percentage of DAO members that cast a negative vote on the proposal was less than 0.01%.

Aave was subjected to a $60 million short attempt in November 2022, which was eventually unsuccessful. In response, the company modified its governance practises.