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AAVE Gains Capital Share in DeFi, Yet Its Prices Stall – What’s Missing?
The recent surge of decentralized finance (DeFi) has seen the rise of various lending protocols. One such protocol is AAVE, which has been gaining popularity due to its competitive interest rates and ease of usage. Despite holding a significant share of capital in the DeFi sector, AAVE’s prices have failed to break out and continue their upward trajectory. In this article, we will analyze the current market trends and explore possible reasons for AAVE’s stagnating price.
According to recent data, AAVE has surpassed all CeFi lenders combined by holding 5% of the stablecoin supply. This is a significant milestone for the protocol as it underscores the growing interest in DeFi lending models. Over the past 2.5 years, AAVE has consistently held between 60-80% of the whole lending sector’s proportion.
However, despite this dominance, the price of AAVE has failed to break out and continue its upward momentum. The recent fluctuations have only resulted in a sideways action, with the price ranging between $248 and $284. Furthermore, liquidity in the order books has declined over the past two days, contributing to the stagnation.
The current market trends suggest that while AAVE is leading on capital metrics, other DeFi protocols are maintaining stronger day-to-day user activity. According to IntoTheBlock data, only 1.46k addresses have been actively using AAVE, which contrasts with DAI and Uniswap having the most active users.
In conclusion, despite being a leader in the DeFi lending sector, AAVE’s prices have stalled due to low liquidity and a lack of sustained momentum.
Source: ambcrypto.com
