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@aaveaave V2 is now 4 days old and has already crossed the 30M TVL mark
While the relentless reviewing and monitoring work goes on, a thread on why there is a lot more to be excited about besides the launch day features 
While the relentless reviewing and monitoring work goes on, a thread on why there is a lot more to be excited about besides the launch day features
First a recap of the main features available at launch - if you read the announement blog post, you already know about them - V2 users are enjoing a new UI (i know i know, the dark theme is coming), substantial gas reductions ( a loop deposit - borrow - repay can be 3x cheaper!)/
the possibility of borrowing at stable and variable at the same time, and the ability to repay with your collateral/swap deposited assets (even when they are used as collateral!). These latest features are enabled by the flashloans V2...
that compared to V1 can be executed on the protocol itself, while also allowing to borrow multiple currencies at the same time (which makes them the perfect tool to move positions between protocols) and eventually, decide to not repay in the same tx but open a loan at the end.
This last capability of flashloans V2 is particularly important: it gives to the protocol native leveraging capabilities - with one transaction you can leverage one (or multiple) assets automatically. @AaveAave V2 can become an amazing protocol for margin trading.
Another feature that will be game changing is the credit delegation; While not yet available in the UI, users can already natively delegate borrowing power to different addresses, for both stable and variable borrowing; this enables a whole lot of new capabilities; /
Besides the ability to effectively issue uncollateralized loans (which require offchain interaction between the issue and the borrower) what excites me the most is what can be built on top; For example managing positions from different wallets, automated farming strategies,
fixed interest rate loans with fixed maturity dates, you name it. Can't wait to see what builders will create during the @ETHGlobal hackaton!
Another important change is the addition of a "Reserve Factor" (a portion of the interest repaid by borrowers is redirected to the $AAVE governance). Compared to other protocols...
The interest accrued for the protocol is minted to the Aave governance in the form of aTokens (you can see the aTokens balances of https://etherscan.io/address/0x464c71f6c2f760dda6093dcb91c24c39e5d6e18c growing). This has two imporant side effects, first one: the governance becomes active participant of the protocol /
which means the reserve will accrue interest and flashloan premiums over time. ATokens also mean borrowing power; credit delegation for example can be used in a variety of ways (eg to improve yield - delegate credit from the governance reserve to a yield farming strategy)
Aave V2 also natively supports liquidity mining; It can be enabled on both aTokens (to reward LPs) and debt tokens (to reward borrowing volume). The governance will need to decide if and when enable liquidity mining and how to allocate rewards.
The data collected in one year and the simulations ran by @gauntletnetwork allowed for a deeper risk analisys and more targeted risk params. Especially for $ETH, $WBTC and $LINK, the maintenance margin (aka liquidation threshold) is higher (82.5%, 75%, 75%).
This allows for improved capital efficiency and better capital allocation. At the same time, the reduce transactions cost for liquidations lowers the bar of profitability for liquidating small loans.
All the functions, including flashloan, now receive a referralCode. I would love to see a proposal from the community regarding integration mining. Integrating Aave and providing volume and users should be rewarded with governance power. A vested AAVE would fit the role perfecly.
Aave V1 pioneered the launch of different liquidity markets at the beginning of the year with the launch of the Uniswap V1 market, which allowed uniswap V1 LP share holders to leverage their shares and borrow against them. Thanks to a great architectural simplification, ...
V2 makes instantiating new markets super easy. Expect in the upcoming months a variety of new markets, both created by the genesis team and by the community, with different risk profiles and asset categories.
The revamped protocol architecture is upgradeable and more flexible compared to V1. This should guarantee longer lifespan and better extensibility for future iterations.
Last but not least, adding assets to existing markets is super easy in V2. Custom aTokens implementations can be used for each currency in order to support different kind of tokens with specific features. Soon the community will fully be in charge and able to create proposals ...
to list new assets to any Aave governance controlled market, without relying on the Aave genesis team. Expect a new and more inclusive governance (very very) soon.
That's it! Excited to see what's to come in the next months - if you want to build on @aaveaave V2 take a look at the V2 docs https://docs.aave.com/developers/ and don't forget to participate in the governance forum http://governance.aave.com
