As the DeFi ecosystem continues to grow, Aave is becoming a dominant player in the space. Specifically, the platform is a leader in DeFi lending, thanks in part to the rapid growth of its stablecoin. This has put Aave in a strong financial position ahead of a major upgrade, expected to boost the token significantly.
On Thursday, March 6th, Aave reached a weekly high of $238.74, thanks to its growing dominance in the DeFi space. Recently, Ark Invest analyst Lorenzo Valente highlighted the recent strengthening of Aave DAO’s financial position. According to Valente, Aave DAO has $115 million in cash reserves, which has more than doubled since 2024.
These reserves are a result of Aave’s dominance of the DeFi lending market. Notably, in December last year, the protocol’s dominance in total value locked (TVL) compared to other lending protocols was at 45%. Volume figures are even higher, as the protocol has a 67% share or $7.4 billion in active loans. At the same time, Aave has higher margins, suggesting that it operates more efficiently than competitors.
At the same time, Aave’s GHO stablecoin is seeing strong growth, reaching a total supply of $205 million. This puts GHO in the 16th position among all stablecoins by market cap, ahead of USDD, Gemini Dollar (GUSD), and Tether’s Euro stablecoin (EURT). All of these metrics are boosting optimism in Aave’s next upgrade.
Aave’s New Governance Proposal to Boost Price
The latest governance proposal aims to boost its tokenomics and attractiveness to buyers. Aave will repurchase $1 million worth of tokens weekly for six months, amounting to $24 million. The goal of this proposal is to increase scarcity and boost the price of the token.
At the same time, the project is also implementing systemic changes. It will introduce a new anti-GHO token for the GHO stablecoin lending ecosystem. The proposal will move 50% of GHO revenue to anti-GHO as a way to reward stakers.
These changes are expected to significantly boost Aave’s attractiveness to holders, potentially leading to long-term price increases.
READ MORE: AAVE Price Prediction: Will the New Proposal Lead to a 90% Surge?
