The Aave Reward (AAVE) has been experiencing an absolute break for several weeks, and today the DeFi token has climbed to a new full high of $ 288.90.

The decentralized finance protocol is one of the most popular in the market and the latest rally in the DeFi sector is one of the driving forces behind the AAVE rally.

In early 2021, the AAVE price was trading at $ 83, and the latest rally appears to have strengthened the growing total locked-in value of the protocol, which increases the volume of spot and derivatives purchases, as well as the continued development of the Aave lending platform and the issuance of term loans. … …

TVL takes off to new heights
DeFi Pulse data shows that Aaves TVL rose from $ 2.03 billion on January 1, and when the price of (BTC) and Ether (ETH) went parabolic, Aaves TVL did the same.

Aaves TVL is currently running on a full-time basis for $ 3.75 billion, making the platform the second largest DeFi platform for TVL after Maker (MKR).

The usual addition of new tokens to the lending and lending protocol increases the likelihood that TVL will continue to grow and will help AAVE maintain its status as one of the best DeFi projects in the cryptocurrency space.

Betting stimulates demand for AAVE tokens
AAVE trading volume also increased in early 2021, rising from $ 200 million on January 3 to a high of $ 928 million on January 16.

When the price of AAVE hit a new high, 24-hour trading volume hit a record $ 1.06 billion. This increase in volume is partly due to the fact that investors are purchasing more tokens for action, with 26.8% of the total access to AAVE currently hosted on the platform, earning an APY of 6.1%.

Fast loans attract investors
Another reason for the recent increase in AAVE is the rise in term loans.

Fast loans allow cryptocurrency holders to coordinate a portfolio to fund other purchases or new cryptocurrencies. Loans also help investors leverage the value of tokens without having to sell them and create a taxable event.

More than $ 1.7 billion have been issued since the launch of Flash loans less than 12 months ago, and this number is expected to grow as the cryptocurrency market evolves.

The total volume of short-term loans issued to date by AAVE. Source: Messari
As you can see from the chart above, the most common token requested for instant loans is the DAI stablecoin, followed by USDC and ETH. Messari’s data shows that Aave disbursed $ 25 million in loans in the first half of 2020, $ 500 million in the third quarter and nearly $ 1 billion in the fourth quarter, including $ 450 million in December.

The expansion of the flash loan concept is likely to attract more users to Aave, especially as it can be used to arbitrate between DEXs, safety switches, self-winding and a range of other applications in the DeFi sector.

Source: CoinTelegraph