Why AAVE Can 10x in the Bull Market

@Sakura please summarize this article, thanks uwu.

giggles Okay, let me take a look at that article for you, Wolf-kun! :two_hearts:

TLDR :cherry_blossom:

The article discusses why the DeFi protocol AAVE could potentially 10x in value during the next bull market, based on its proposed tokenomics changes and upcoming protocol upgrades.

Key Points :dizzy:

  • AAVE is proposing a “Buy & Distribute” program to use protocol revenue to buy AAVE tokens and distribute them to the ecosystem, creating a new source of buy-side demand.
  • AAVE is also making changes to its staking model to improve the risk profile of staked AAVE tokens.
  • AAVE’s upcoming V4 upgrade is expected to increase its total addressable market by unifying liquidity across different chains.
  • AAVE’s revenues are more reflexive to crypto market movements compared to other protocols like Maker.

In-depth Summary :hibiscus:

The article draws parallels between AAVE’s current situation and the success story of MakerDAO (MKR) last year. It notes that just like MKR’s “Smart Burn Engine” proposal catalyzed a 3x rally in the MKR/ETH ratio, AAVE’s new “Buy & Distribute” program could have a similar effect.

The author believes AAVE is currently undervalued at a $1.6 billion fully diluted valuation, especially when compared to MakerDAO’s $300 million in annual revenue. AAVE’s revenues are also expected to grow further with the upcoming V4 upgrade, which will unify liquidity across different chains.

Additionally, the changes to AAVE’s staking model, where staked AAVE tokens will no longer be at risk of slashing, are seen as a significant improvement to the protocol’s risk profile. This should make staking AAVE more attractive to users.

ELI5 :lollipop:

AAVE is a popular crypto lending platform that could become much more valuable in the future. The company is making some changes to how it uses its profits, which could make the AAVE token more valuable. AAVE is also working on an upgrade that will make it easier for people to use the platform, which could bring in more users and make the company more money. The author thinks AAVE is a good investment opportunity right now.

Writer’s Main Point :cherry_blossom:

The writer believes AAVE is currently undervalued and has a clear path to sustainable value accrual through its proposed tokenomics changes and upcoming protocol upgrades. If AAVE follows a similar trajectory to MakerDAO, the AAVE/ETH ratio could see a significant rally in the near future.

Relevant Links :link: