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Aave V3 is finally launched on Ethereum! Introduction to three new features, significantly reducing gas fees

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Aave V3 is finally launched on Ethereum! Introduction to three new features, significantly reducing gas fees

The lending protocol Aave, after launching Aave V3 on six blockchains since March last year, finally went live on Ethereum yesterday (28). Aave V3 not only introduces three new features but also significantly reduces gas fees.

Table of Contents

According to previous reports, Aave V3 has added the following three new features:

1. Portal: This feature will facilitate cross-chain transactions, allowing assets to seamlessly transfer on Aave V3 markets on different chains, aiming to address the current liquidity fragmentation across chains. In other words, assets can be transferred on Polygon, Fantom, Avalanche, Arbitrum, Optimism, Harmony, and the latest addition, Ethereum.

2. Efficient Mode: Also known as "E-Mode," this feature allows users to increase their borrowing power by using similar assets as collateral, thus increasing the loan-to-value ratio and enabling borrowers to borrow more assets.

Efficient Mode Illustration: Providing similar asset categories significantly increases borrowing limits

3. Isolated Mode: Newly listed assets labeled as Isolated will have borrowing limits and can only lend out specific assets such as stablecoins, ETH, and wETH. Additionally, they cannot be used as collateral alongside other assets.

While this feature may seem restrictive, Aave will expedite the process of adding new assets as collateral. Once isolated assets become more stable and mature, borrowing limits will be increased, and the isolation restrictions will be further lifted.

Isolated Mode Illustration

In addition to the new features mentioned above, Aave V3 has optimized gas fees, expected to reduce gas costs by 20-25% across all functions.

Since January of this year, the AAVE token has risen by over 70%, with a price of $87.3 at the time of writing.

AAVE/USDT Daily Chart