DeFi Legends Compound vs. AAVE Grants DAO 2022 | V3 Loan Value USDT, USDC, DAI, and WMATIC

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AAVE was once the largest DeFi protocol on earth. The protocol led both the Decentralized Finance and Lending markets. The main competitor was Compound. Over time, however, the Dapp lost its position on both fronts. It is worth noting that AAVE can regain its glory by enhancing its ecosystem.m. But what does this mean for their investors in new DAO structure?

AAVE brings back Grants DAO

One of the biggest elements of AAVE’s growth has been the AAVE Grants DAO. Starting in May last year, the DAO ran for one quarter.

The community-led grants program focuses on building a solid ecosystem by funding ideas, projects, and events that benefit the AAVE ecosystem.

Now with the proposed third iteration, the DAO will be provisioning $6 million for AAVE for the next two quarters, providing $3 million every quarter.

To date, since May 2021, the DAO has funded 32 developer grants and events to ensure protocols are visible throughout the ecosystem and plans on doing the same on a much larger level this time around.

AAVE Grants’ funded projects | Source: Twitter

On the back of this announcement, AAVE did note fluctuations, at press time, it rose by 11%

This way DeFi coin remains open to the possibilities of a price recovery soon, given bearishness is finally receding after being in a squeeze release since 14 March.

AAVE price action | Source: TradingView – AMBCrypto

The price action will find some support from the growing utility of V3, particularly in the Polygon market. Loan volumes finally picked up pace this month and are currently averaging at $10 million – $12 million.

AAVE V3 loan volume | Source: Dune – AMBCrypto

Currently, most of the loan is taken out in USDT, USDC, DAI, and WMATIC, but over the week, asset distribution has noted GHST (Aavegotchi) as an emerging choice of token as well.

On the other hand, deposits on V3 have been rather low this month, with volume averaging between $1 million to $2 million. Given the uncertainty of the market, it makes sense for investors to hold onto their tokens since they might have to sell and cash out should the market crash again.

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