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Aave Protocol (AAVE) Releases Unique AMM Liquidity Pool, Uniswap (UNI) and Balancer (BAL) Tokens Onboard

Tue, 03/16/2021 - 13:12
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Vladislav Sopov
Leading decentralized financial ecosystem Aave Protocol (AAVE) has integrated its first external liquidity pool tokens, from Uniswap and Balancer
Aave Protocol (AAVE) Releases Unique AMM Liquidity Pool, Uniswap (UNI) and Balancer (BAL) Tokens Onboard
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Aave Protocol (AAVE), one of the most advanced DeFi ecosystems so far, has released its AMM Market that allows for seamless integration of LP tokens from other protocols. Balancer (BAL) and Uniswap (UNI) are the pioneers of the new instrument.

"The Multi-Market Approach": Exploring new frontiers

According to the official announcement by Aave's Marc Zeller, the protocol launched AMM Market. This model allows users to collateralize liquidity provider tokens of various protocols. The first release empowers LP assets of Uniswap (UNI) and Balancer (BAL) with this functionality.

Aave Protocols launches AMM market
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Liquidity provider tokens ("LP tokens") represent a sort of reward for providing liquidity to DeFi ecosystems. Thus, "yield farmers" from Balancer (BAL) and Uniswap (UNI) can benefit on Aave Protocol (AAVE) with rewards from their "native" protocols.

Namely, Aave Protocol (AAVE) now allows the collateralization of 14 Uniswap LP tokens, including DAI/USDC, DAI/WETH, WBTC/USDC and others, as well as Balancer's WBTC/WETH and BAL/WETH tokens.

While collateralizing these assets, Aave Protocol (AAVE) users can borrow DAI, USDC, ETH, wBTC, USDT and AMM's LP tokens.

More protocols to come

To ensure accurate pricing, the new system harnesses the power of Chainlink's (LINK) decentralized oracle infrastructure. Smart contracts for this purpose underwent a technical audit by ConsenSys Diligence.

The Aave Protocol (AAVE) team is sure that many more protocols will be integrated into Aave's AMM Market. The final decision on this type of integration will be up to the AAVE holders ("AAVE Governance"):

In DeFi there are no Aave users and there are no AMMs users. There are only DeFi users.

As a result, all proposals to allow the collateralization of new assets should be submitted to the governance forum with the assistance of community representatives.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (, Monoreto, Attic Lab etc.)