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- AAVE has rolled out its Automated Market Makers (AMM) market on Wednesday
- The market is expected to use the multi-market approach that will provide better security and risk mitigation
- The first phase of the development will bring support for fourteen pairs
Aave, a decentralized liquidity protocol allowing its users to unlock liquidity across various assets in a multi-pool way. In an official announcement, the protocol has revealed the launch of its Automated Market Makers (AMM) market on Wednesday. The latest liquidity pool will enable users to deposit and borrow digital assets from Aave’s AMM Liquidity Pool. Moreover, it will enable Uniswap and BanaceLabs liquidity providers to use liquidity providers (LP) tokens as collateral in the Aave protocol. The fact will allow Uniswap and BalanceLabs (LP) token holders to offer liquidity and gain a share of swaps within a particular pool.
AAVE AMM market will bring security and risk management
As the decentralized finance (DeFi) sector is soaring to the moon, the most sought-after passive income method is found as yield-farming. Yield-farming allows the liquidity to provide tokens in liquidity pools and earn interest on the collateralized tokens. The latest launch Aave market with numerous liquidity pools is expected to enable better security and risk mitigation features.
First phase of the development will bring 14 crypto pairs
In the first phase of Aave’s new project, fourteen pairs are expected to launch. Indeed, UNI and BAL liquidity support providing tokens collateral is expected to only launch in the 1st phase. In this phase, a few portions of both UNI and BAL tokens would be made available in different liquidity pools.
For the second phase of development, it is expected that Aave might add other liquidity markets to its platform. However, it will depend on the first phase of liquidity pools’ success. According to the announcement, any further additions will be decided by the AAVE holders, who have joined governance.
Liquidity pool would launch on the Ethereum blockchain
Following Aave’s official tweets, it is observed that the AMM liquidity pool would initially launch on Ethereum. However, it also can be included on other networks, which will potentially open new frontiers for the community.
On the other side, it is known that the value of the token will be acquired using Chainlink’s oracle. And ConsenSys Diligence has audited the smart contract that will be calculating the value.
