Aave Releases v3.2: Supports Lido Finance – What Does It Mean For DeFi?

Aave v3.2 is out, with developers releasing Liquid eModes and supporting Lido Finance, but what is Aave Finance’s v3.2?

What’s cool about crypto and DeFi is all the effort developers put into their protocols to improve efficiency and user experience.

The effort looks at billions in total value locked (TVL) across different decentralized finance apps.

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The evidence is strewn everywhere; just look at the leaps made by Lido, Curve, Uniswap, PancakeSwap, and all other top platforms.

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Yesterday, Aave, undoubtedly one of TVL’s largest DeFi dApps, rolled out yet another exciting feature.

In a post on X, the development team announced Aave v3.2, an upgrade introducing new features to simplify lending, borrowing, and asset management.

This upgrade included the introduction of Liquid eModes, a feature supported by all Aave versions—not just 3.2.

If you are wondering what Liquid eModes does and if it’s a DeFi game-changer, read on.

To appreciate what the team just pulled off, know one thing: Aave is a decentralized bank.

It puts the power back into your hands, allowing you to lend or borrow assets anytime, anywhere.

If you have wBTC, for example, you can deposit and earn interest.

Should you want to borrow without paperwork? Easy. Just lock your asset and receive cash fast.

For what Aave does, it currently manages over $13.7 billion, and it is safe to say that it is a big player in the DeFi scene.

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So, What’s The Deal With Aave v3.2?

Aave v3.2 introduces liquid eModes, short for “efficient modes,” to make lending and borrowing more flexible and, most importantly, cost-effective.

And here’s the catch. The first categories of eMode will launch on Lido Finance, the largest DeFi protocol in the world.

On this platform, anyone can stake ETH and earn a yield at the end of the year.

What’s attractive about Lido Finance is that you can lock your ETH, earn a reward, shuffle your assets, and commit them to other activities.

This way, you don’t miss out on other exciting DeFi opportunities, like those offered by Aave v3.2.

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How Do Aave’s New Liquid eModes Work?

With Liquid eModes, Aave is simply stepping up its game and extending its lead in the process.

Through Liquid eModes, Aave creates categories for certain assets, making it easier to group them in ways that make borrowing or lending more efficient.

Each “Liquid eMode” category offers supported assets with the same risk profiles and borrowing power.

For example, stablecoins or ETH-based assets can be placed under the same “eMode.” This “eMode” will become a “combination” whenever a borrower chooses two or more assets to become collateral backing their loans.

According to Stani Kulechov–the founder of Aave– the Lido Market will now support multiple eMode combinations, including westETH/ETH emode or the ezETH/ETH eMode in the same pool.

The outcome? The new feature will give you improved control and flexibility, enabling you to quickly fine-tune your loans.

Additionally, the team mentioned that gas efficiency will be significantly enhanced, which is especially important given the high costs of main net transfers. This is a huge relief.

This also allows you to manage your risks more effectively based on your chosen parameters.

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