Aave and MakerDAO: DeFi’s Big Players Make Big Moves

The decentralized finance (DeFi) sector is witnessing significant developments, with Aave and MakerDAO grabbing the spotlight. Aave just rolled out its V4 update, and MakerDAO launched its ambitious Endgame plan. These developments are pushing both platforms to new levels, cementing their importance in the DeFi scene.

On August 5th, Aave saw a huge spike in daily revenue, topping $6 million. This spike was primarily driven by a series of liquidations following a drop in Ethereum’s price. Aave, known for its innovative features like flash loans, recorded $2.1 million in daily revenue directly linked to these liquidations.

Aave Protocol withstood market stress across 14 active markets on various L1s and L2s, securing $21B worth of value.

Aave Treasury was rewarded with $6M in revenue overnight from decentralized liquidations for keeping the markets safe.

This is why building DeFi is FTW.

— Stani (@StaniKulechov) August 5, 2024

The platform’s founder, Stani Kulechov, highlighted Aave’s resilience during market stress across 14 active markets on multiple Layer 1 (L1) and Layer 2 (L2) blockchains, securing $21 billion in value.

Kulechov also mentioned that Aave’s Treasury pocketed $6 million from those decentralized liquidations – a nice bonus for helping keep the market stable. Most of this money came from Aave’s v3 version on Ethereum, which raked in $1.25 million in liquidation fees on August 6th.

Total liquidations on Aave v3 hit $234 million, with Wrapped Ether (WETH) and Wrapped stETH (wstETH) being the assets people lost the most. One wallet in particular, 0x645…c4bfa, got hit by a massive $73 million in liquidations. That is a big chunk – 31% of all the liquidations on the platform.

MakerDAO, famous for its stablecoin DAI, is also shaking things up with its new Endgame plan. Rune Christensen, the founder, first talked about this plan back in March. It’s all about making MakerDAO’s governance more decentralized and the whole system more stable.

A key part of this plan is the Lockstake Engine (LSE). It is meant to get MKR and NewGovToken holders to commit for the long haul. If they lock up their assets on the LSE, they’ll get new Dai and NewStable tokens. Plus, they’ll get tokens from SubDAO platforms, like the SPK token from Spark SubDAO.

The Endgame plan also involves setting up six SubDAOs. These will spread out the governance even more and each one will look after a specific part of the Maker ecosystem. The idea is that these SubDAOs will help MakerDAO come up with new ideas and run more smoothly. It’s a pretty big change for how the platform is governed.

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