As the DeFi ecosystem continues to grow, Aave is becoming a dominant player in the space

Specifically, the platform is a leader in DeFi lending, thanks in part to the rapid growth of its stablecoin.

As the decentralized finance (DeFi) ecosystem continues to expand, Aave is emerging as a dominant player. Notably, the protocol is a leading force in DeFi lending, thanks in part to the rapid growth of its stablecoin. This has placed Aave in a strong financial position ahead of a major upgrade, which is expected to benefit the token significantly.

On Thursday, March 6th, Aave reached a weekly high of $238.74, highlighting the increasing optimism surrounding the project. Recently, Ark Invest analyst Lorenzo Valente shed light on the recent strengthening of Aave DAO’s financial position. According to Valente, Aave DAO now has $115 million in cash reserves, more than double the amount from 2024.

This vast wealth is a result of Aave’s dominance of the DeFi lending market. For instance, in December, the protocol’s dominance in total value locked (TVL) compared to other lending protocols was 45%. Volume figures are even higher, as the protocol has a 67% share or $7.4 billion in active loans. At the same time, Aave has higher margins, suggesting that it operates more efficiently than competitors.

At the same time, Aave’s GHO stablecoin is seeing strong growth, reaching a total supply of $205 million. This puts GHO in the 16th position among all stablecoins by market cap, ahead of USDD, Gemini Dollar (GUSD), and Tether’s Euro stablecoin (EURT). All of these metrics are boosting optimism in Aave’s next upgrade.

Aave’s New Governance Proposal to Boost Price

The latest governance proposal aims to boost its tokenomics and attractiveness to buyers. Aave will repurchase $1 million worth of tokens weekly for six months, amounting to $24 million. The goal of this proposal is to increase scarcity and boost the price of the token.

At the same time, the project is also implementing systemic changes. It will introduce a new anti-GHO token for the GHO stablecoin lending ecosystem. The proposal will move 50% of GHO revenue to anti-GHO as a way to reward stakers.

These changes are expected to significantly boost Aave’s attractiveness to holders, potentially leading to long-term price increases.