AAVE V3: Enhancing Capital Efficiency and Security

Ajay110

"Protocol V3 was officially launched on March 17th with the aim of enhancing cross-chain functionality, improving capital efficiency, and security. It currently supports Polygon, Arbitrum, Avalanche, Fantom, Harmony, and Optimism. As of April 21st, its Total Value Locked (TVL) is approximately $1.21 billion. In addition to gas fee optimization and risk management improvements, AAVE V3's new features primarily include:

1. Cross-chain asset mobility: AAVE V3 allows users to seamlessly move their assets across different networks and markets, supporting cross-chain borrowing. For example, users can deposit funds on Polygon, borrow on Arbitrum, and repay on Avalanche.

2. Efficiency Mode (eMode): AAVE V3 categorizes assets into specific classes, typically based on the underlying asset. When users borrow assets from the same class as their collateral, they can access higher borrowing capacity.

3. Isolation Mode: In AAVE V3's isolation mode, users can only borrow specific types of assets (e.g., stablecoins, ETH, WETH) and cannot use other assets as collateral. This restricts the protocol's exposure and risk to newly listed assets."

Prabhakar75

Security is indeed very critical.

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Jafar224

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