AAVE has been on a good rise recently, with the number of active borrowers on its platform hitting a record high of about 41,000 per week. AAVE has survived the last bull and bear market and reached a record high this year. In this round of borrower growth, BASE and Scroll contributed the most, accounting for 23.4% and 21%, respectively, which also kept AAVE's revenue relatively strong.
In the last bull market cycle, smart contract platforms such as Polygon, Avalanche, and Fantom incentivized a large number of users and liquidity, creating AAVE's peak revenue. From the beginning of this year to now, AAVE's TVL has almost doubled, mainly due to the rise in the prices of collateral assets such as WBTC and ETH. Currently, AAVe's quarterly revenue has exceeded the revenue in the fourth quarter of 2021 during the peak of the bull market.
This time the price has risen by 57%. Will AAVE continue to rise? How high can it rise?
Let me give my answer first: AAVE will definitely reach $200 within a month.
Here are the reasons:
1. This round of increase is due to the explosion of the AAVE protocol. The increase in deposits, loans, and new users within the protocol ecosystem and the sufficient bilateral network effect laid the foundation for the increase.
2. The AAVE protocol has not had any major contract security issues so far. The security and stability of the platform have strengthened AAVE's credibility in the DeFi field, making it more likely to gain the favor of DeFi users and even large investors.
3. AAVE has achieved comprehensive DAO management. Compared with centralized management, DAO management information disclosure is more comprehensive. DAO community members include risk control service providers, market makers, third-party development teams, financial advisory teams and other professional institutions, with diversified participants and higher governance participation.
4. AAVE has achieved multi-chain ecological development and has been deployed on almost all EVM L1/L2 chains. It can be said that except for the BNB chain, none of the others can compete.
5. AAVE is about to launch V4, which will enhance the protocol functions and cross-chain liquidity. By achieving seamless liquidity across multiple networks, EVM and non-EVM chains, it will eliminate the complexity of cross-chain lending and exchange, making cross-chain smoother. V4 will be ready for the next 1 billion users to introduce DeFi.
6. AAVE protocol’s stablecoin $GHO. This year, GHO has finally achieved stability, with prices fluctuating between 0.99-1, and successfully pegged to the US dollar. This will help AAVE explore RWA products in the future. At the same time, the protocol will introduce “anti-GHO” tokens to enhance the consistency between AAVE pledgers and GHO borrowers and enhance the functionality of GHO stablecoins. It is expected that AAVE will benefit from the stablecoin sector.
7. AAVE’s TVL is 11 billion, far ahead of the second-place CRV, making it the top of the list. AAVE is almost completely diluted, and there will be no major supply unlocking in the future, so there will be no significant increase in token supply to affect the price.
8. In terms of token economics, AAVE has launched a reform aimed at enhancing the practicality of tokens by introducing a revenue sharing mechanism. I believe that through a series of measures, when the reform is completed, it will be a good time for AAVE to explode.
9. Judging from the market, AAVE is at a relative bottom both in weekly and monthly charts. Now that the protocol is developing in full swing, this price is far from the low point, and there is still more room for growth in the future.
Summary: AAVE is a car with a moat as its framework, the upcoming V4 of the protocol as its engine, the token economics innovation as its new performance material, and the growing number of new users of the protocol as its fuel. These are the firm supports that enable AAVE to run smoothly. I believe that with these additions, AAVE will become smoother and smoother when the road (market) is stable. Hold on firmly and make the most of your efforts!