The AAVE price was driven to a new all-time high by increasing value demand for flash loans and a strong rally in DeFi tokens.
For weeks, Aave (AAVE) has been on an unfavorable matchup and the DeFi-token surged on January 25 to a fresh all-time high of $288.90.
The decentralized finance protocol is among the most famous in the market and is one of the major factors underlying AAVE’s rise is the recent rally in the DeFi sector.
#AAVE reached a new all-time high at $288 as the total value locked and 24-hour volume surged to record levels https://t.co/cTsFyG1O1h — Cointelegraph Markets (@CointelegraphMT) January 25, 2021
AAVE values were selling at $83 at the beginning of 2021, and the latest surge seems to have improved the protocol’s locked total increase in value, rising on-the-spot buying value and derivatives transactions, and the ongoing growth of Aave’s funding network and issuing of quick loans.
TVL is skyrocketing up to a new high
DeFi Pulse statistics show that on Jan. 1 Aave’s TVL grew around $2.03 billion and as the value of (BTC) and Ether (ETH) went symmetric, Aave’s TVL also grew.
Aave’s TVL currently rests at a fresh all-time high of $3.75 billion, rendering the business after Creator the second-largest DeFi business for TVL (MKR).
The constant introduction of new tokens to the loans and other financial system increases the probability that its TVL will keep on increasing and helps AAVE retain its place in the cryptocurrency space as one of the top DeFi projects.
Serving pushes AAVE token demand
The trading volume of AAVE also increased at the start of 2021, rising through $200 million on Jan. 3 to a peak on Jan. 16 of $928 million.
As the price of AAVE hit a new peak, the 24-hour market capitalization scored a record $1.06 billion. This value rise is motivated in part by investors purchasing more cashing tokens, with 26.8 percent of AAVE’s available quantity presently staking on the market receiving an APY of 6.1 percent
Investors are drawn by quick loans
The success of its quick loans is a further explanation for AAVE’s latest increase.
Quick loans enable owners of cryptocurrencies to raise their portfolio to finance other transactions or new transactions of cryptocurrencies. The loans also allow investors to use the value of their tokens without selling them and causing a taxing occurrence.
Over $1.7 billion has been released since the introduction of quick loans just under 12 months, and this amount is expected to rise as the crypto-bull market advances.
As shown in the graph above, DAI stablecoin, preceded by USDC and ETH, is the very prevalent token demanded for quick loans. Messari’s data reveals that during the first half of 2020, Aave released $25 million in loans, $500 million in Q3, and nearly $1 billion in Q4, namely $450 million in December.
The growth of the idea of quick loans is sure to garner further consumers to Aave, particularly as they can be employed within the DeFi sector for derivatives market amongst DEXs, leverage exchanges, self-liquidations and a number of other uses.
Source: Cointelegraph