The native token for the largest lending protocol has climbed to a more than two-year high of $234, giving it a market cap of $3.5 billion.
The Aave DAO is in the middle of a governance process to change the economics of the protocol’s native token AAVE
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Posted December 2, 2024 at 5:26 pm EST.
The net deposits of decentralized finance protocol Aave, widely used for its borrowing and lending services, reached a new record as of Sunday, making Aave bigger than thousands of commercial banks in the U.S.
In the last month, crypto users have added roughly $10.4 billion in net deposits. The total amount now stands at about $31.4 billion, a 50% increase from $20.9 billion at the start of November.
At its current level of net deposits, Aave would be ranked 63rd by consolidated assets among insured U.S.-chartered commercial banks, ahead of Commerce Bank and BNY, as of Sept. 30 data from the Federal Reserve.
The onchain figures of Aave coincide with the protocol’s native token jumping about 14% in the last 24 hours and 69% over the past 30 days to change hands at $234, a price level that hasn’t been seen since April 2022, per CoinGecko. The token’s market cap now sits at nearly $3.5 billion.
Read More: Aave Is Using New Oracles by Chaos Labs to Automate Its Risk Management System
Part of AAVE’s upswing stems from a potential fee switch for the token. Aave DAO is currently accepting detailed feedback about a governance proposal that aims to change AAVE’s tokenomics by allowing holders to collect rewards generated from the protocol’s revenue. The DeFi platform charges fees to those who borrow capital.
While the governance update passed a temperature check in July, the proposal still needs several steps, such as a formal submission through Aave’s governance contracts and an onchain vote amongst AAVE token holders.
“The @Aave growth [in net deposits] this quarter ($18B ➡️ $31B) matches the entire size of all other lending protocols combined,” wrote founder of Aave Chan Initiative Marc Zeller on X early Monday, citing data from blockchain analytics firm Token Terminal. Stani Kulechov added in a tweet, “Aave is growing faster than ever.”
