Aave Launches Its v2 Liquidity Mining Program

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

It has been reported that users who deposit stablecoins into the protocol can earn an additional yield of between 4.78% and 13.49% on top of their regular gains in the form of staked Aave (stkAAVE) tokens as of April 27.

However, Wrapped Bitcoin (wBTC) deposits are also paying an extra 4.59%, while Ether (ETH) deposits are garnering 2.11% in rewards.


It's mining times at Aave V2! The lending giant has launched its liquidity mining program for stablecoin investors. Will this influence its positioning as DeFi's dominant lending protocol?https://t.co/lT379La7Os — Cointelegraph (@Cointelegraph) April 28, 2021

The report said that the highest rewards appear to be going to stablecoin borrowers, who are currently receiving rewards of between 5.15% and 22.05%. The liquidity mining program was passed through a governance vote on Saturday, with 2,200 staked Aave (stkAAVE) set to be distributed to lenders and borrowers until July 15, worth roughly $880,000 at current prices. The program will be reviewed in July.


AIP-16 received overwhelming ‘yea’ votes from the community and has officially been executed. This proposal, created by @paraficapital, introduces liquidity mining incentives for Aave V2 ⛏️🗳️https://t.co/ewa2Yvlc3w pic.twitter.com/s7xgz21eZ8 — Aave (@AaveAave) April 26, 2021

Likewise, more than two-thirds of rewards have been designated to the USD Coin (USDC) and Tether (USDT) markets, with the remaining 32.5% being distributed among Aave’s Dai, ETH, wBTC, and Gemini Dollar (GUSD) markets.

Aave stated:

“AIP 16 increases the liquidity in the Aave Ecosystem Reserve, which can be used to fund grants, devs, and builders through a community-led grants programme.”

It added that it wanted to reward stable tokens more to discourage risky borrowing and boost stablecoin liquidity. With around 40% of Aave’s TVL still locked in its version 1 iteration, the v2 rewards campaign is also intended to migrate users to its updated protocol.

Thus, Aave said:

“By introducing liquidity mining rewards only on Aave v2, liquidity providers and borrowers will naturally migrate toward the optimized version.”

Source: Cointelegraph

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