Happy Wednesday fellow DeFi degens!
I was expecting to spend a large portion of this edition of Finance Redefined analyzing Aave s liquidity mining program. There was some anxiety from investors that the emission of 2,200 $AAVE per day (which would translate to roughly 5% of the ecosystem reserve fund of 2.8 million AAVE per year) might end up dragging down the token s price as farmers earn and dump.
I would feel very uncomfortable holding an asset if the governance token of a very important protocol ends up in the hands of people who only think about short term gains. Grogu (@eip1559) April 26, 2021
Turns out, it s unnecessary: the program s an unmitigated success. The AAVE token is up nearly 15% since the launch of liquidity mining to $462, and the protocol s total value locked figure has surged to $11.8 billion up from just over $7 billion since liquidity mining began.
Ethereum Users Will See The Biggest Benefit
The DEX will be rollout in stages, its Proof-of-Concept is live for developers on the mainnet, CowSwap Exchange. When fully deployed, users will leverage the Gnosis Protocol solution to execute trades after they have been batched, as shown in the image below. The transaction must be signed, collected by a “solver”, batched and sent via the Gnosis Protocol for final settlement with Ethereum’s DeFi ecosystem.
Source: Felix Leupold Software Engineering Lead Gnosis
Leupold classified the BGP as a “breakthrough”. After years of development, the solution can “tap into the liquidity of any on-chain protocol” and leverage Flashbots’ tools to prevent a transaction to be sandwiched or affected by manipulation. In a press release, Fernando Martinelli, Balancer CEO said the following on the partnership: