Aave is a decentralised non-custodial liquidity market protocol founded by Stani Kulechov in 2017. Users can use this protocol to lend or borrow crypto. Last year AAVE introduced innovative crypto credit — undercollaterized loans and a stablecoin pegged to the dollar.

Aave was developing an update to its protocol, V3 protocol, for more than a year. The main features of the protocol were presented at governance.aave back in November 2021 and finally Aave V3 protocol was launched on Ethereum. On January 27, Aave announced on Twitter that Aave V3 “is now live on the Ethereum market.”

Aave on Twitter:

Aave Protocol V3 is now live on the Ethereum market

"The most exciting aspect of V3 is its flexible design, which enables a variety of new risk mitigation features, and its improved capital efficiency & decentralized liquidity - all while reducing gas costs."

The Aave V3 protocol offers many features that users can apply when interacting with the Ethereum mainnet. Aave V3 protocol offers users a High-Efficiency Mode, which allows users to increase capital efficiency, and Isolation Mode, which allows the listing of more assets on Aave.

Aave on Twitter:

Isolation Mode: enables more assets to be listed on Aave as collateral while maintaining the security of the protocol. Liquidity risks can be siloed by listing assets in isolation mode.

In addition to High-Efficiency Mode and Isolation Mode, Aave V3 protocol also implements a Gas Optimization system, which reduces gas cost by 20–25%.

Aave on Twitter:

Decentralization drives our community forward and with this shared mission in mind, we will continue to build and innovate together

The Aave team are now actively promoting the migration from V2 to the V3 protocol.

Aave on Twitter:

In the Aave Fam we have a saying, "Leave no Ghost Behind", we are applying this same approach when migrating our community from V2 to V3 . We built this migration tool for @ethereum , @0xPolygon, and @avalancheavax

And on February 5, a vote was held in the Aave community, during which 99.96% of users voted to add cbETH (a liquid staking derivative token issued by Coinbase) to the Aave V3 market on Ethereum.

Aave on Twitter:

The Aave community has voted to add cbETH a liquid staking derivative token issued by @coinbase to Aave V3 market on Ethereum. An important decision that could help Increase the diversity of validators supporting Ethereum and LSDs on Aave.

Aave protocol is slowly but surely improving every day. To know what will happen to Aave and other ongoing crypto projects, subscribe to our newsletter. And we shall continue to observe.