Can New Launches from Aave and Sushi Usher in DeFi’s Comeback?

Sushi rolls out long-awaited Trident framework on Polygon, while Aave’s V3 brings money markets cross-chain

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • Sushi has fallen out of the top 10 decentralized exchanges by volume, according to Coingecko
  • Aave’s total value locked peaked at nearly $20 billion in October 2021

As DeFi projects have lost their luster and trading volumes have tanked, two new blue-chip protocols are trying to once again catch the eye of big-money investors. 

A new product from the DAO team at Sushi has launched its beta on the Polygon proof-of-stake blockchain. A new set of money Legos for the DeFi space, the project, dubbed Trident, is being billed as a “production framework for building and deploying AMMs.”

Aave V3, meanwhile, has launched on six different chains, enabling cross-chain transactions, among a host of new features.

The two protocols, well-regarded DeFi (decentralized finance) projects that originated from 2020’s “DeFi summer,” have a combined total value locked of around $16 billion — even though their DAO (decentralized autonomous organization) governance tokens have tanked.

SUSHI is down around 88% from its March 2021 peak of $23.05, while AAVE has fallen 76% since a May 2021 peak of $631.26, per Coingecko.

As the hype around so-called DeFi 2.0 upstart projects such as OlympusDAO and Wonderland has faded in recent months, the product launches may signal a shift back to industry stalwarts.

A refreshed Sushi

The community of developers and Sushi adherents have been through a rough patch since a management shakeup last year, which saw Sushi’s co-founder depart in September and its chief technology officer resign in December.

That inevitably led to delays in the progress toward Trident, but the DAO team announced the beta version rollout in the group’s blog Wednesday.

This system can be used for “creating any [automated market-maker] anyone would ever need,” according to the blog. Unlike the prior version, Trident allows anyone to create a liquidity pool, much like Uniswap does. Unlike Uniswap, the pools can have an imbalance of tokens rather than a 50-50 split — a feature of another rival decentralized exchange, Balancer.

The full feature set is expected to be made available following the completion of security audits, and Trident will also eventually be pushed out to other chains, such as Ethereum’s mainnet.

Aave adds more Ethereum-compatible chains

Aave unveiled its third-generation app this week. Aave’s DAO community approved deployments on Polygon, plus Ethereum layer-2s Arbitrum, Optimism, and other layer-1 networks compatible with the Ethereum virtual machine — Fantom, Avalanche and Harmony. Deployment to Ethereum’s mainnet is still in the works.

Among the goals of V3 are “greater capital efficiencies, increased security, and cross-chain functionality,” according to the announcement.

​​“This is a huge milestone for one of the most popular liquidity protocols in DeFi and furthers our mission to bring DeFi to the next hundreds of millions of people,” Polygon co-founder Sandeep Nailwal said in a statement.

A standout is the “Portals” feature, which allows DAO-approved bridging protocols to facilitate cross-chain transactions, so that assets within Aave can readily flow between disparate blockchains without a DeFi user having to withdraw, bridge and redeposit assets in separate transactions.

“The cross-chain portal will enable users to port their own liquidity from one network to another, at their discretion. It will allow each iteration of the protocol on the various networks to scale quite quickly with the depth of capitalization,” Nicolo Stewen, Aave’s Director of Strategy, told Blockworks.

The app’s “High Efficiency Mode” allows borrowers to obtain greater buying power when using similar assets, such as stablecoins, as collateral.

“Isolation Mode” addresses one of the culprits behind many high-value exploits — most recently the $11 million loss on Agave, an Aave fork on the Gnosis Ethereum sidechain — having to do with the listing of new collateral assets that prove to be unsafe. By walling off certain categories of assets, V3 limits risk.

On the security front, Aave’s V3 code has been audited by multiple firms, such as Sigma Prime, Trail of Bits, Open Zeppelin, ABDK and PeckShield, and has undergone verification by Certora.

Its open-source code is released under a business license similar to that of Uniswap V3.

As with the predominant V2, Aave V3 will integrate with popular DeFi apps and dashboards, including 1Inch, Debank, DeFisaver, Instadapp, Paraswap, Zapper and Zerion.

“Incredibly excited for what this means for the future of the Aave Protocol and the Aave Community as a whole, both in terms of its scalability and its flexibility as the space continues to evolve,” Stewen said.

This story was updated on March 21 at 3:15 a.m. ET with comments from Nicolo Stewen


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

The Department of Justice and Commodity Futures Trading Commission announced back-to-back lawsuits against KuCoin Tuesday

article-image

Judge Failla found that Coinbase didn’t operate as an unregistered broker in offering its wallet service

article-image

A fund by Laser Digital offers investors exposure to the Polygon network, while a new 21Shares ETP focuses on staking rewards from Toncoin

article-image

Sponsored

The TRON network’s integration into Dune brings a wealth of data and insights to the fingertips of users

article-image

A BTC futures fund offered by Hashdex and Tidal Investments has gotten regulatory clearance to hold bitcoin directly

article-image

At launch, Chain Signatures will be compatible with Bitcoin, Ethereum and Cosmos network chains, as well as DogeCoin and XRP Ledger