As the crypto bull market continues to gain momentum, the price of Aave’s native token (AAVE) is moving towards new all-time highs.
The growth of the decentralized lending platform appears to be helped by improving fundamentals, steadily growing the total value locked on the platform, and creating a DeFi-based crypto collectible and community called Aavegotchi.
Undeniably, Aave was one of the DeFi success stories of 2020 as its price jumped from $ 2 in January 2020 to today’s all-time high of $ 123.92.
The most recent breakout has seen the price rise 52.6% in the past 3 days, and a number of analysts attribute some of the rise to the “Coinbase Effect” after the leading US crypto exchange announced plans, AAVE Listed on December 15th.
AAVE tracks the progress of Bitcoin
According to DeFi Pulse, Aave is now the second tier DeFi platform as per the Total Value Locked metric with currently $ 2.41 billion total entrusted to the platform.
The platform also appears to have a correlation between the total value locked on the platform and the price movement of BTC. As shown in the price table below, as the BTC price increases, so does the value locked on the Aave platform.
The decision to expand beyond Ethereum into the broader crypto-economy and trade BTC via Layer 2 solutions in addition to the Ethereum protocol appears to have been an integral part of the growing success of Aave and its growing decentralized financial offerings.
The use of DeFi, Layer 2 technology and NFTs is catalyzing growth
Crypto is an ever evolving sector and the most active, resourceful tokens tend to retain their value and growth potential when compared to meme tokens and projects with no roadmaps.
As the DeFi and NFT sectors grew in popularity over the course of 2020, Team Aavegotchi (GHST) launched a DeFi-enabled crypto collector project that combines DeFi properties with the growing trend of NFT and crypto collectibles.
GHST was launched as a DAO regulated token sale, a DAICO, where all funds raised were managed by the community. The platform allows users to collect, combine, and compete with their Aavegotchis.
Users can also use their GHST tokens on the Aavegotchi platform to generate frens that they can use to purchase raffle tickets for special items or summon new Aavegotchi tokens.
By keeping up with emerging trends in the crypto sector, the team appears to have strengthened its ecosystem, and this may have enabled AAVE to weather the sharp sell-off in the DeFi sector that occurred in mid-October.
During the DeFi correction, many tokens lost up to 80% of their value and AAVE and GHST tokens were not spared from the carnage. This resulted in the team delaying the launch of its NFT platform and the recent 70% rally of Ether (ETH) forced the Aavegotchi team to delay the launch of the Ethereum mainnet due to rising gas fees.
This week the team announced that Aavegotchi will initially switch to the Matic Network after starting on Etheruem.
The team confirmed this decision with the community and stated that OpenSea, one of the largest NFT marketplaces, will soon also be launched on Matic. These revelations coincided with a spike in the MATIC price, and in the past 24 hours the token rose 28%.
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