New token tied to value of AAVE aims to simplify DeFi for users
A DeFi ecosystem is launching a token that delivers a new way of gaining exposure to this continually growing space.
The rAAVE token is being launched by GrowthDeFi on Feb. 7 — and it has a target price of 1 AAVE. A rebasing mechanism provides adjustments on a daily basis.
This means that the supply of rAAVE increases whenever its price exceeds 1 AAVE — and in such a positive scenario, token balances are adjusted accordingly, with 10% of newly minted tokens going to the project’s treasury. If rAAVE’s price falls below 1 AAVE, supply subsequently decreases.
Proceeds generated by the rAAVE treasury are subsequently distributed to this token’s liquidity providers through the use of incentives.
All the good of DeFi in a single token
It’s hoped that rAAVE’s user interface will be simple to use. The team behind this ecosystem say one of their top priorities is ensuring that transactions are as cheap as possible, given how expensive the Ethereum blockchain can be.
An innovative approach is being taken to yield farming. Once ETH, AAVE or GRO is deposited, half is sold for the liquidity pool pairing — and within this transaction, the LP tokens are automatically staked. This helps to preserve profits that could have been lost through high gas fees.
Three main pools are provided for rAAVE through the Uniswap decentralized exchange — connecting this token with GRO, ETH and AAVE.
One of the rAAVE treasury’s main objectives is to sell rAAVE when the market cap exceeds the treasury’s total worth — and conversely buy it back when the market cap falls below this level. Under certain circumstances, the rAAVE obtained through positive rebases can also be used to add an incentive to Uniswap pools.
“The entire monetary policy is meant to take advantage of the fact that the crypto and DeFi markets are far from rational and thus create extreme periods of overpriced and underpriced opportunities,” the team said.
How it works
As reported by Cointelegraph last month, GrowthDeFi’s goal is to maximize yields from top platforms — leveraging the power of an unlimited amount of protocols, with a particular focus on Aave and Compound. Those who own GRO tokens can participate in the governance of this platform — and the stkGRO DAO is also responsible for controlling rAAVE’s treasury.
On Jan. 22, Growth DeFi announced that it had hit a significant milestone after hitting $10 million in total value locked for the first time. The ecosystem also announced that it was planning to launch a new suite of gTokens, which help to deliver liquidity from a multitude of blockchains.
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