The decentralized financial position in crypto has grown in 2020 and users pay interest on locked funds (security) in exchange for loans. DeFi Protocol Aave recently introduced its second version, V2, and is adding additional capabilities to the sector.
“At DeFi, the assets that were used as security were restricted, but now V2 is free to trade,” Aave founder Stanny Kolekhov said in a blog Thursday. “Users can trade with their deposits in all currencies supported by the Aave protocol, even if they are used as collateral.”
Many of DeFi’s adhesive protocols and related assets have skyrocketed in popularity in 2020. Even the assets of one project, YFI, have grown from under $ 1,000 to $ 38,000 this summer. Much of the activity in the DeFi room is related to blocking cryptocurrencies as collateral on the platforms and receiving interest in exchange for borrowed assets, which are then redistributed.
Allowing trading in locked assets also adds liquidation protections and mail details. Additionally, the Aave release shows two other features, including improvements in term loans and the use of collateral to settle loans, which essentially take steps and transactions out of the equation. Previously, a borrower without outside capital required multiple cycles of write-offs, swaps, and debt repayments to close his position.
Other updates in version 2 include spot settlements, instant lending loans, debt allocation, self-loan authorization, gas improvement, and change in loan interest rates. When Aave makes the transition to the second edition, the team has built options that allow users to keep credits on the go.
“AIP-3 was recently moved to make the transition from V1 to V2 smoother,” says Aave. The recipe adds: “With the Flash Loan-Based Migration Tool, users will be able to migrate without closing their V1 credit centers.” “This migration tool will be introduced at a later time, so if you have V1 jobs, you don’t need to close them.”
As if these updates weren’t enough, the protocol also added other security measures for the entire process. “V2 also provides a buffer to fund the long-term sustainability of the DAO,” he said.
DeFi is growing incredibly quickly given the amount of rapid development, accompanied by the influx of money, that has been flowing rapidly into the sector.