Aave Becomes the Dominant DeFi Platform Thanks to Stablecoins and ChainLink

The ongoing evolution of decentralized finance cannot be ignored. Projects are competing for traction, and the top rankings tend to get shaken up regularly. Aave is now the dominant platform, ever since it introduced support for new assets. 

The Rise of Aave

Given the sheer amount of lending platforms in DeFi today, it is interesting to keep tabs on the internal competition. Aave is now the dominant platform on the market. It has overtaken Maker, which had previously lost the top spot to Compound and reclaimed it successfully. Speaking of Compound, it has now been relegated to fourth place, and may drop further down the rankings soon.

For Aave, there has been major growth in the past few weeks. Its total value locked has risen from just under $500 million to over $1.45 billion in very quick succession. Sustaining such a level of growth will not be easy. All DeFi platforms are very liquid, and users will switch services depending on where they can make more money.

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Source: DeFi Pulse

That being said, Aave has seen an influx of fresh capital since making some platform changes. Supporting additional assets will attract more investors and speculators.  Opening up the platform to ChainLink users, for example, was perhaps a smart decision. It is unclear what role LINK plays in the extra liquidity for the platform, but it is certainly a contributing factor.

Thanks to making such changes, Aave’s TVL has noted healthy growth. One day, the platform received nearly $428 million in fresh capital. There have also been multiple days of $50 million and more, with very little money being withdrawn lately.  

BlocDesk Aave Collateral Tokens
Source: CoinGecko

Aave now has several of its native collateral tokens listed on CoinGecko as well. The USDC, TUSD, and LINK tokens all note a market cap of over $230 million individually. This further goes to show how important stablecoins have become in decentralized finance. 

Nearing $7 Billion in TVL

The total value locked across DeFi platforms remains an intriguing statistic. While it remains to be seen how valid these calculations are, they tell an interesting tale. .According to DeFi Pulse, there is now $6.91 billion locked in decentralized finance. All of this is without including all DeFi platforms on the market, and without direct support for Bitcoin, XRP, or other key assets. 

BlocDesk Defi TVL
Source: DeFi Pulse

One has to wonder how these rankings will look in the future. Many of these projects see initial success, and then struggle to keep their TVL high enough.  Continuing to innovate, build, and grow is necessary to remain relevant in the industry. Otherwise, newer platforms will keep rising the ranks, whereas the others will slowly fade out. It is a very intriguing industry, but one that is far from reaching its final form.