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Finance

Defi Giant Aave Rakes in $6M in Revenue as Crypto Market Plunges

Aave shows defiance during the sell-off by profiting off user liquidations.

By Oliver Knight
AccessTimeIconAug 5, 2024 at 9:37 a.m. UTC
Updated Aug 5, 2024 at 9:39 a.m. UTC
(Alexander Mils/Unsplash)
(Alexander Mils/Unsplash)
  • $350 million worth of DeFi positions were liquidated during the market sell-off.
  • Aave secured $6 million in revenue from processing on-chain liquidations.
  • One $7.4 million WETH position was liquidated, providing Aave with $802,000 in revenue.
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    • The founder of decentralized finance (DeFi) protocol Aave said the platform generated $6 million of revenue during Monday's crypto market sell-off.

    The plunge trickled down to DeFi after last week's Bank of Japan decision to hike interest rates and Friday's U.S. jobs report. Ether (ETH) is down by more than 20% over the past 24 hours whilst aave (AAVE) has lost 23.7% of its market cap.

    The sell-off led to more than $1 billion being liquidated across crypto derivatives markets, with a further $350 million liquidated on DeFi protocols, according to Parsec Finance.

    "Aave Protocol withstood market stress across 14 active markets on various L1s and L2s, securing $21B worth of value," Aave's Stani Kulechov wrote on X. "Aave Treasury was rewarded with $6M in revenue overnight from decentralized liquidations for keeping the markets safe."

    The decline in crypto prices led to several liquidations on Aave, including a $7.4 million wrapped ether (WETH) position, which yielded revenue of $802,000 for the company, according to on-chain data.

    The total value locked (TVL) on DeFi protocols is now at $71 billion having dropped from $100 billion at the turn of the month, DefiLlama data shows.

    Edited by Sheldon Reback.

    Disclosure

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    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Oliver Knight
    Oliver Knight

    Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.

    Follow @OKnightCrypto on Twitter