AAVE, the open-source defi protocol launched its Automated Market Maker (AMM) market today with the option for $UNI and $BAL LP tokens as collateral for liquidity pools. This would allow $BAL and $UNI LP token holders to provide liquidity and earn a share of swaps within a particular liquidity pool.
The firm also revealed that there would e significant synergies between Balancer and the Aave Protocol.
Today, users can begin depositing and borrowing crypto assets from the Aave AMM Liquidity Pool, enabling @Uniswap and @BalancerLabs liquidity providers to use their LP tokens as collateral in Aave Protocol
https://t.co/Gf0WZ6fWiy
— Aave (@AaveAave) March 16, 2021
The support for $UNI and $BAL LP tokens collateral would be launched in the first phase where a certain portion of both the tokens would be made available for different liquidity pools. The AAVE platform would also allow for $DAI, $USDC, $ETH, and $wBTC borrowing and use as collateral. The primary reason for Uniswap inclusion could be its significant daily volume and $4B of liquidity.
The firm revealed that it may add other liquidity markets to its platform in the second phase of its development depending on the success of the first phase liquidity pools.
AAVE to Use Multi-Market Approach For Better Security and Liquidity
The yield-farming phase at the peak of Defi rise was the most sought-after passive income method, allowing traders to put their LP tokens in liquidity pools and earn interest on the collaterized tokens. The new AAVE AMM market with several Liquidity pools would offer better security and risk mitigation.
The first phase of the project would launch with a total of 14 pairs that include,
- DAI/USDC
- WBTC/USDC
- DAI/WETH
- USDC/WETH
- AAVE/WETH
- LINK/WETH
- BAT/WETH
- SNX/WETH
- UNI/WETH
- YFI/WETH
- CRV/WETH
- MKR/WETH
- REN/WETH
- WITH/WETH
AAVE completed the development and launch of its Proof of Concept (PoC) automated market last year with Uniswap collateral support. Uniswap is the center of gravity of AMM protocols. Its robust, simple code and innovative model inspired actors across several blockchains.
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