The Aave DAO, the community behind the leading decentralized finance (DeFi) protocol with $18.69 billion in Total Value Locked (TVL), today announced the launch of Aave v3.2. This upgrade introduces Liquid eMode, empowering users with greater control over their borrowing and collateral strategies and offering enhanced flexibility in managing risk. Additionally, v3.2 streamlines the protocol codebase, improving gas efficiency and making it easier to maintain.
Liquid eMode builds on the success of High-Efficiency Mode (eMode), first introduced with Aave v3, allowing Aave to categorize each asset differently based on its Loan-to-Value (LTV), liquidation threshold, and liquidation bonus. With Liquid eModes, multiple eModes can be applied to a single asset. This enhancement gives users more control and flexibility over their collateral and borrowing assets and how they interact with risk settings. The liquid eMode feature is also backward compatible, so existing eMode borrow positions will be unaffected.
“Liquid eModes are a powerful new feature, enabling more flexible configurations on the Aave Protocol for users to unlock use cases and the granularity of their positions,” said Ernesto Boado, co-founder of BGD Labs, the team proposing the v3.2 upgrade to the Aave DAO. “Users can choose the eMode that best suits their strategy, based on the available LTV ratios and liquidation thresholds.”
Key Benefits of Liquid eModes:
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Enhanced Flexibility: Allows users to choose the eMode that best suits their strategy based on the available LTV ratios and liquidation thresholds.
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Customizable Risk Management: Enables users to decide whether specific assets should be used only as collateral or be borrowable within a particular eMode.
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Improved Efficiency: Expanded configuration options make risk management more efficient for a variety of asset combinations.
In addition, v3.2 simplifies the codebase, removing stable rate-related logic, improving gas efficiency, and making the code easier to maintain. The updates to the interest rate calculations and the removal of outdated functions related to stable rates provide a smoother and more cost-effective experience for users. For more details on the v3.2 upgrade, please visit here.
About Aave Protocol
Aave is a non-custodial, open-sourced decentralized liquidity protocol that allows users to act as depositors and earn passive income, as well as borrow a wide range of digital assets without the need of third-party intermediaries. Core capabilities include risk mitigation features such as supply and borrow caps, and flash loans which allow users to borrow and repay assets within the same blockchain transaction block. GHO is a decentralized, overcollateralized stablecoin native to the Aave Protocol. The Aave Protocol is fully governed by the Aave Decentralized Autonomous Organization (DAO). Visit https://governance.aave.com/ to learn more and take part in Aave Governance. Please find the Aave Brand Kit here.