Can Aave and Sushi “new products” lead to a comeback of DeFi?

In 2022, more and more people will focus on the NFT field, and the DeFi market seems to have lost its luster.

The data will not lie. From the analysis provided by Coingecko, “Sushi” SushiSwap has already fallen out of the top ten DEX trading volume, and Aave’s lock-up volume has also shrunk to around $12 billion after reaching a peak of $20 billion in October 2021. , almost cut in half.

So, will DeFi protocols throw in the towel? Obviously not! In fact, two blue-chip DeFi protocols, Aave and Sushi, are trying to attract investors’ attention again through innovation.

The DAO team at SushiSwap has launched a beta version of a new product on the Polygon proof-of-stake blockchain, a project dubbed Trident that aims to allow any developer to build and deploy an automated market making (AMM) model of production frameworks Create a custom AMM with Trident, which in turn provides DeFi investors with a new set of “DeFi Legos”. At the same time, Aave V3 was also announced to be launched on six different blockchains, including Polygon, Arbitrum, Avalanche, Fantom, Harmony and Optimism, with an undetermined date for the Ethereum mainnet launch. The Aave v3 upgrade will introduce new features such as cross-chain asset liquidity, community contribution tools, gas optimization models, and high-efficiency models. In addition, a series of decentralized applications will be integrated.

Frankly speaking, both Aave and Sushi were one of the most respected DeFi projects during the “DeFi Summer” period of that year. Although the prices of governance tokens of these two protocols fell, the total lock-up volume of these two protocols still reached 160 About $100 million (Xingjun o-daily Note: According to Coingecko data, SUSHI is down about 88% from its peak of $23.05 in March 2021, while AAVE is down 76% from its peak of $631.26 in May 2021. ). In fact, the attention surrounding so-called DeFi 2.0 upstart projects such as OlympusDAO and Wonderland has dropped significantly in recent months, and by contrast, the launch of new products from these “old” DeFi projects may herald a DeFi comeback.

Can Aave and Sushi "new products" lead to a comeback of DeFi?

Refreshed Sushi

In 2021, SushiSwap’s management was restructured, the project co-founder left in September, and the CTO also announced his resignation in December. Since then, project developers and Sushi followers, as well as the entire Sushi community, have had a difficult time.

Just when many thought that SushiSwap’s AMM project Trident would inevitably experience delays, the Sushi DAO team arrived on schedule, announcing the Trident beta version on its official blog this week. So, what changes will this bring to SushiSwap?

The biggest feature of the Trident system is that it can “create any [automatic market maker] that anyone needs.” Compared to previous versions, Trident now enables anyone to create liquidity pools, just like Uniswap does, but unlike Uniswap, Trident allows these liquidity pools to support unbalanced token proportions instead of traditionally The “50-50” ratio splits the pool of funds. From this point of view, Trident appears to be combining features from Uniswap and another competitor , Balancer .

If all goes well, full functionality is expected to be available after the security audit is complete, and Trident will eventually support other blockchains as well, such as Ethereum.

Aave who didn’t want to hang on a tree

For a long time, Aave has been “limited” to the Ethereum blockchain, and it seems that it rarely tries cross-chain business. But now, with the growing pressure of development, Aave clearly doesn’t want to “hang on a tree.”

This week, Aave released an updated version V3 of the app, and the Aave DAO community has also approved listings on six different blockchains, including Polygon, Ethereum Layer 2 Arbitrum, Optimism, and EVM-compatible Layer 1 networks Avalanche, Fantom and Harmony. As for the deployment on the Ethereum main network, Aave officially said that it is still in progress, and I believe it should not wait too long.

According to the Aave announcement, the new version will offer “increased capital efficiency, improved security, and cross-chain capabilities.” In this regard, Polygon co-founder Sandeep Nailwal said:

“As one of the most popular liquidity protocols in DeFi, Aave V3 is undoubtedly a huge milestone that furthers DeFi’s mission to go mainstream.”

Aave V3 has three major features worth paying attention to:

1. “Portals” function : The portal function of Aave V3 allows the DAO to approve the bridging agreement, which can promote cross-chain transactions more fairly, and then promote the assets within Aave to be transferred between different blockchains Easy liquidity without DeFi users having to withdraw, bridge and re-deposit assets in separate transactions.

2. “High Efficiency” Mode : Aave V3’s Efficiency Mode allows borrowers to gain greater purchasing power when using similar assets (such as stablecoins) as collateral.

3. “Isolation” mode : In fact, many high-value DeFi protocols have been hacked due to security vulnerabilities, resulting in a large loss of funds. Just recently, the Agave protocol, the Aave fork project deployed by the 1Hive community on the Gnosis Chain, was attacked, with a loss of $11 million. This problem arises largely because the protocol lists insecure collateral assets. The “isolation” mode of Aave V3 can solve this problem. By isolating some high-risk assets, it effectively protects user security while limiting risks.

In terms of security, Aave’s V3 code has been audited by companies such as Sigma Prime, Trail of Bits, Open Zeppelin, ABDK, and PeckShield, and verified by Certora, and its open source code is under a commercial license similar to Uniswap V3 posted.

Also, like the V2 version, Aave V3 will integrate with mainstream DeFi applications and protocols, including 1Inch, Debank, DeFisaver, Instadapp, Parswap, Zapper, and Zerion. Nicolò Stewen, Director of Strategy at Aave, put it this way:

“The release of Aave V3 is a significant release for the Aave protocol and the entire Aave community, as the new version provides significant improvements in both scalability and flexibility.”


Since the beginning of 2022, the crypto asset market has been in a downward trend, and the former “DeFi King” Andre Cronje has also announced his retirement. These events have indeed made many people worry about the future development of the DeFi market. However, some leading DeFi protocols do not seem to have given up hope. By releasing these new products, they may be able to push the industry forward.

Of course, whether these products can be successful in the end still needs to be verified by the market.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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