Assessing AAVE’s performance after protocol launched its V3

Are you conversant in Decentralized Finance (DeFi)? If that’s the case, are you a Liquidity Supplier? In case your reply is sure, then it’s best to know that Aave, the ghost protocol that means that you can borrow and lend cryptocurrencies, provide liquidity, and stake liquidity within the type of cryptocurrencies rolled out its V3 on 16 March.

Based on the protocol, the V3 of the Aave Platform launched important modifications to the platform. These modifications included enabling cross-chain transactions, provision of upper borrowing energy, the itemizing of latest property whereas defending the protocol, and fuel optimization amongst a number of different upgrades to the system.

A have a look at the efficiency of the protocol’s native token, AAVE,  confirmed some traction in early April following the launch. Nonetheless, this was then adopted by a reversal that plunged the value of the AAVE token additional downwards. What else did we discover?

Value took a beating

On 16 March when the V3 launch was introduced, the value stood at $122 per AAVE token. 75 days later, this stood at $101. Inside that interval, the token declined by 17%. In the course of the interval beneath evaluate, the AAVE token marked a excessive of $259 on 1 April. Nonetheless, the cryptocurrency market worth correction that plagued the month of April pressured the value downwards. Between then and the time of writing, the token shed over 50% of its worth.

The market capitalization of the AAVE token additionally noticed some decline inside the interval beneath evaluate. Standing at $1.66 billion as of 16 March when the Aave V3 was launched, the token has since shed 15% of its market capitalization. On the time of writing, the market cap of the token stood at $1.41 billion.

Additional to this, the AAVE token was no stranger to the value correction that the majority cash suffered in April. Actions on the value chart revealed important bearish bias in April because the Relative Energy Index (RSI) and the Cash Circulate index (MFI) took their positions in overbought areas as the final market underwent a correction.

Because the reversal began, these indicators have each taken on an uptrend pointing at a gradual accumulation of the AAVE token. At press time, the RSI stood at 48.84 in an upward curve. The MFI additionally maintained a place on the 62.36 area.

Good days, however largely unhealthy ones

Inside the interval beneath evaluate, a have a look at information from the chain confirmed that though the token recorded highs on some metrics on the identical days, the holistic evaluation pointed at a mean efficiency at finest. 

Inside the stated interval, the variety of addresses created on the community noticed a 55% decline. Though a excessive of 603 new addresses was created on 29 March and 446 on 13 Might, the expansion of the community has not witnessed any important enchancment.

Following the same development, the transaction quantity for the AAVE token additionally recorded important highs simply twice inside the interval beneath evaluate. A transaction quantity of 1.96 million on 29 March. Additionally, a transaction quantity of two.03 million was recorded on 11 Might.

As well as, important whale actions have been noticed between 29 March and 1 April. For transactions above  $100k, a transaction rely of 975 was recorded on 29 March. Equally, on 1 April, a transaction rely of 862 was recorded. This was then adopted by a big lower in whale transactions rely pegging this metric at 4 on the time of press.

For transactions above $1 million, the token additionally noticed a excessive of 29 in transactions rely on 29 March and 25 transactions on 31 March. This was adopted by a discount in transactions rely and this metric was noticed at 11 at press time.