Recently DeFi protocol managed to create a suitable method through which users could migrate to their updated platform of v2. This can mainly be done by paying more. Aave has not resorted to this method yet.
During 2020 DeFi Summer, Compound has brought some heat by pulling out one of the old ideas of liquidity mining. They were very willing to give rewards to both borrowers and lenders under the COMP administration. This was done with tokens in order to make it the leading lender in the entire Ethereum network.
Aave Against Liquidity Mining
Lately, in order to maintain the trend, a decentralized finance competitor called Aave has been trying to find its foothold in the mining program. As a result from 27th April, Tuesday, it has launched a way by which the users will have to pay in Stake Aave before borrowing or lending. These will include Wrapped Bitcoin, Ethereum, or other stable coins including USDC, USDT, GUSD, and DAI.
Nonetheless, the payment will not be a few pennies. DeFi is the cover title allotted to the entire blockchain-related protocols which eliminate financial intermediaries. This further makes borrowing and lending possible without credit checks or loan officers.
Liquidity mining is also called ‘yield farming’. This involves pooling cryptocurrencies in one fund for lending to others. The users are already earning rewards for locking up their native tokens along with the deposit interest. Staked Aave now is worth almost $400 which can be converted to tokens within 10 days’ time.
The platform is distributing Stakes Aave of 2,200 every day. However, they are still trying to catch up while Uniswap had already tried liquidity mining during last October-November.