Aave’s LEND token continues to rally after DeFi protocol introduced staking rewards in its Aavenomics proposal.
On July 29 the price of Aave (LEND) surged 23% as the project released its tokenomics update proposal called Aavenomics.
The upside move brought LEND’s market cap to $447 million and will surely have investors curious on whether the DeFi-related token will surge higher as it has already gained nearly 600% over the past 3 months.
LEND/USD chart. Source: TradingView
Currently, LEND ranks at 30 place by market capitalization and the project recently surpassed Compound (COMP) token to become the second most popular DeFi governance token after MakerDAO (MKR). However, LEND has yet to break its all-time high of $0.372 reached on July 19.
LEND has seen impressive gains as this altcoin has significantly outperformed Bitcoin in 2020 with 600% gains in the last 3 months. However, LEND is not alone.
At least 10 other DeFi-related tokens have risen by more than 100% in 2020, largely due to the hype created around yield farming and the growth of the DeFi sector.
Aavenomics gives LEND investors rewards
With the new Aavenomics update, Aave will introduce several changes including a token swap that will see LEND tokens swapped for AAVE tokens at a 100:1 rate.
However, the most important update is the proposal for an incentive structure for AAVE token holders, who will either approve or deny this proposal. As DeFi protocols compete for liquidity, Aave will provide staking rewards to its users through liquidity and safety incentives.
Jordan Lazaro Gustave, COO at Aave told Cointelegraph:
“Stakers in the Safety Module will get fees from the Aave Protocol, Aave safety incentives, trading fees from the balancer pool + BAL reward. Liquidity providers will get liquidity mining incentives. All of this is up to governance discussion and approval.”
These staking rewards will be funded through the Aave token migration event which will allocate 3 million AAVE tokens for protocol incentives in the Aave Ecosystem Reserve.
According to Gustave, the community has been waiting for this update for quite some time. In fact, there’s a chance that the upcoming incentive structure has influenced LEND’s price surge over the last few months.
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