Decentralized Finance (DeFi) protocol, Aave, hit a new milestone today, becoming the largest DeFi project with over $1.44 billion worth of assets locked in the platform.
Aave is an open-source protocol that allows the creation of a money market where users can deposit assets and earn some interest when they borrow money,
Following the addition of Aave as a Bancor V2 pool, the project has soared to greater heights as a result of Aave ($LEND) holders providing liquidity and earning a share in the Bancor trading fee, as an incentive for logging in funds.
Before now, DeFi protocol MakerDAO, the company behind the DAI crypto-backed stabelcoin was the largest DeFi project with the highest amount locked. However, Maker is now ranking second, below Aave with a total value of $1.43 billion locked in the project, according to data on DeFiPulse.
Aside from the TVL, data on CoinMarketCap (CMC) reveals that $LEND, the native token of the Aave project has also outranked Maker ($MKR). At the time of writing, $LEND is the 24th largest cryptocurrency in the world with a market cap of $933 million while $MKR is ranked 30, with a market cap of $663 million.
DeFi continues to boom
Meanwhile, the total value locked in the DeFi protocols has continued to soar in recent weeks and the total value locked in DeFi has just a few thousand shy of the $7 billion mark. If the sector continues to grow at this rate, the TVL could double before the end of the year.
Despite reaching new highs, some core players in the industry have expressed concerns of uncertainty over the dangers of investing funds in DeFi projects.
Ethereum co-founder Vitalik Buterin recently warned that people are underestimating DeFi risks, noting that the sector is not yet safe enough for mainstream usage.
“Are we safe enough that we can promise a chance of breaking of less than 2% a year? I don’t think we can get there yet. DeFi is still fine, but don’t act like its a place where you should advocate for a lot of regular people to put their life savings into,” he said.
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