Aave v2 launches liquidity mining program concentrating on stablecoin debtors


Aave has launched liquidity mining incentives for its v2 protocol, paying out governance token rewards exceeding 20% to customers who borrow stablecoins. 

On the time of writing, customers who deposit stablecoins into the protocol can earn an addition yield of between 4.78% and 13.49% on prime of their common beneficial properties within the type of staked AAVE (stkAAVE) tokens. Wrapped Bitcoin deposits are additionally paying an additional 4.59%, whereas Ether deposits are garnering 2.11% in rewards.

Nonetheless, the very best rewards look like going to stablecoin debtors, who’re at present receiving rewards of between 5.15% and 22.05%

The liquidity mining program was passed by means of a governance vote on April 24, with 2,200 staked AAVE (stkAAVE) set to be distributed to lenders and debtors till July 15, price roughly $880,000 at present costs. This system can be reviewed in July.

Greater than two-thirds of rewards have been designated to the USDC and USDT markets, with the remaining 32.5% being distributed amongst Aave’s DAI, ETH, wBTC, and GUSD markets. Aave said:

“AIP 16 will increase the liquidity within the Aave Ecosystem Reserve, which can be utilized to fund grants, devs, and builders by means of a community-led grants programme.”

Aave mentioned they needed to reward steady tokens extra to discourage dangerous borrowing and increase stablecoin liquidity.

With roughly 40% of Aave’s TVL nonetheless locked in its model one iteration, the v2 rewards marketing campaign can also be meant emigrate customers to its up to date protocol. “By introducing liquidity mining rewards solely on Aave v2, liquidity suppliers and debtors will naturally migrate towards the optimized model,” Aave mentioned.

This system follows the success of liquidity mining rewards incentivizing customers to discover Aave’s deployment on Layer-two scaling resolution, Polygon (beforehand often known as Matic). An April 25 tweet famous that Aave’s Polygon deployment had surpassed $1 billion in TVL and seven,200 customers inside ten days after its launch in accordance with a tweet on April 25.

In keeping with DeFi Llama, Aave is at present the sixth-largest DeFi protocol with a TVL of roughly $7.5 billion.