Aave V3 to Combat 96% Decline in New Users on Ethereum Platform

• Aave recently proposed the launch of Aave V3 on Ethereum to combat the decline of new users on the platform.
• Aave V3 is currently functional on six blockchain networks, with Aave V2 existing on Ethereum, Avalanche, and Polygon.
• Data from Dune Analytics has revealed a 96% decline in the count of daily new unique users on Aave since May 2022.

Aave, the decentralized lending protocol, recently proposed the launch of Aave V3 on Ethereum in response to the declining number of new users. The proposal was put forward with the aim of increasing user numbers and generating more revenue for the platform.

Aave V3 is a major upgrade to the existing Aave V2 protocol, which is currently functional on six different blockchain networks, including Ethereum, Avalanche, Optimism, Polygon, Arbitrum, Fantom, and Harmony. Aave V2 only exists on Ethereum, Avalanche, and Polygon, while Aave V3 has been launched and functional on all six of the aforementioned networks.

According to DefiLlama, Aave V2 is ranked fourth in terms of total value locked (TVL) with $4.1 billion, following Lido Finance, MakerDAO, and Curve. In the span of one year, the protocol’s TVL has risen by 28%. As of this writing, Aave’s V3 stood at $525.96 million.

In October 2022, the community members voted and approved a proposal to implement a new V3 upgrade on the Ethereum network instead of upgrading the V2 pool. The proposal included the listing of pre-approved tokens such as WBTC, WETH, wstETH, USDC, DAI, LINK, and AAVE.

Data from Dune Analytics has revealed a steady decline in the count of daily new users since May 2022. This decline has caused Aave’s daily revenue to drop by over 70%. The count of daily new unique users on Aave has since fallen by 96%.

It is clear that the launch of Aave V3 on Ethereum could be a major step towards increasing user numbers and generating more revenue for the platform. The proposal has already been approved by the community members, and its activation is expected to be completed soon.