Among the plethora of digital assets, there are some Ethereum tokens that have emerged as prominent players, each offering unique concepts, use cases, and real-world applications.
In this article, we will delve into the fundamentals of LIDO, MakerDAO, and AAVE tokens. Let’s take a look at these Ethereum Coins.
1) Lido
LIDO is a decentralized finance (DeFi) protocol that bridges the gap between staked assets and liquidity. Staking is a process wherein cryptocurrency holders lock up their tokens to support the network’s security and receive staking rewards. However, staked assets are typically illiquid, preventing users from accessing their funds without unstaking and waiting for a specific time period. LIDO tokenizes staked assets, allowing liquidity providers to deposit their staked tokens in exchange for LIDO tokens, which represent a share in the staked pool.
📈 Lido Analytics: July 24 – July 31, 2023
– TVL up due to new ETH & SOL deposits – now $14.94b.
– Lido 1st in net new ETH staking deposits (7d: 116.9k ETH).
– Curve ETH/stETH LP reserves see outflow – now 107,107 ETH / 109,208 stETH (≈-24%).
– stETH/ETH rate stable at 0.9993. pic.twitter.com/1Wb4wAmPgz— Lido (@LidoFinance) August 1, 2023
The LIDO token offers several compelling use cases. Firstly, LIDO tokens can be utilized as collateral in various DeFi applications, unlocking a wide range of financial possibilities. Moreover, LIDO allows participation in staking for smaller investors who may not meet the minimum staking requirements of certain networks.
As of the latest developments, LIDO has been steadily expanding its offerings to support additional staking assets. Ethereum 2.0 staking is already operational, and the project has been working to integrate support for staking assets on other blockchain networks. Broadening its reach and appeal to a more extensive user base.
31/07/2023
📈 APR: 5.69%
🏦 Total staked: 7,926,634.48 (+5,379.80) $ETH
🤑 Rewards
CL: 675.94 (+0.23%) $ETH
EL: 697.43 (+286.73%) $ETH
Total: 1,373.37 (+60.68%) $ETH📤 Withdrawal requests
Finalized: 114 (15,476.69 $ETH)
Pending: 31💻 New validators: 328
— Lido Digest (@LidoDigest) July 31, 2023
2) MakerDAO
MakerDAO is a groundbreaking decentralized autonomous organization (DAO) that operates on the Ethereum blockchain. At its core, MakerDAO is designed to enable the creation of the DAI stablecoin, which is pegged to the US Dollar. The system operates through smart contracts and collateralized debt positions (CDPs). Users deposit Ethereum (ETH) as collateral and generate DAI tokens based on that collateral. The entire process is governed by the MKR token holders, who participate in decision-making and risk management within the DAO.
Maker Governance has approved an increase in the Debt Ceiling from 20 million to 200 million through a Governance Poll.
Once deployed via an upcoming Executive Vote, this new cap will make an additional 180 million DAI available for borrowing from Spark Protocol’s lending venue. pic.twitter.com/zVdlc2bBYD
— Maker (@MakerDAO) August 2, 2023
The MakerDAO ecosystem presents several significant use cases. Firstly, DAI stablecoin serves as a reliable store of value and a medium of exchange in the volatile cryptocurrency market. Additionally, MakerDAO offers users the opportunity to access liquidity without the need to sell their underlying crypto assets. This ability to generate DAI against deposited collateral has been particularly valuable in periods of market downturns or when traders seek leverage while avoiding excessive risk exposure.
The most notable recent development in the MakerDAO ecosystem has been the addition of new collateral types beyond just Ethereum. This expansion has been part of a strategic effort to diversify the collateral pool, reduce risk concentration, and enhance the stability and resilience of the DAI stablecoin. Furthermore, MakerDAO has been exploring Layer 2 solutions to address scalability challenges on the Ethereum network, aiming to improve transaction speeds and reduce fees.
• DAI growth
Average earnings assets showed no change from the previous month but had a significant 65% increase in QoQ and a substantial 39% increase YoY due to reduced stablecoins in PSMs.
DAI outstanding decreased 3.4% MoM to 4.63 billion DAI. pic.twitter.com/9YP9BHWbcl
— Maker (@MakerDAO) July 31, 2023
3) AAVE
AAVE is a decentralized lending protocol that enables users to lend and borrow various cryptocurrencies without the need for traditional intermediaries like banks. The protocol operates through a series of smart contracts on the Ethereum blockchain. AAVE allows users to deposit their digital assets into liquidity pools, earning interest on their deposits, while borrowers can access these funds by posting collateral.
The Aave DAO has successfully launched @GHOAave on the Ethereum Mainnet. Congrats to the Aave community on this historic moment! pic.twitter.com/Br3QGqMU8X
— Aave (@AaveAave) July 15, 2023
The AAVE token presents several compelling use cases. Firstly, it facilitates passive income generation for liquidity providers who deposit their assets into the protocol, earning interest on their holdings. Additionally, AAVE enables borrowers to access liquidity without the need for credit checks or extensive paperwork, democratizing financial services and opening up opportunities for those who may not have access to traditional banking facilities.
AAVE has been actively involved in the exploration of Layer 2 solutions to address scalability challenges on Ethereum. By implementing Layer 2 scaling, AAVE aims to improve the user experience and reduce transaction fees, making the platform more accessible to a broader audience. Furthermore, AAVE has been expanding its range of supported assets to provide users with more options for lending and borrowing.
The Aave V3 Ethereum Market recently reached a notable milestone, as it welcomed 10,000 unique addresses in just under six months. pic.twitter.com/RHs4qyk2nK
— Aave (@AaveAave) July 20, 2023
Conclusion
LIDO, MakerDAO, and AAVE tokens represent significant advancements in the decentralized finance space, each offering unique concepts and use cases. LIDO’s liquid staking solution bridges the gap between liquidity and staked assets, MakerDAO’s DAI stablecoin provides a reliable pegged asset. And AAVE’s lending protocol empowers users with decentralized borrowing and lending opportunities.
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