Ethereum Users Optimistic About Aave Liquidity Mining Launch

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Users lending and borrowing assets on Aave through the Optimism Tier 2 chain can now receive additional OP tokens.

• OP Token Liquidity Mining is now active in the Aave Optimism edition.
• Since the release of the update, deposits in Aave on Optimism have increased by 493%.
• The liquidity extraction program also helped increase Optimism’s total value to over $1.5 billion.

A new liquidity mining program on Aave helped raise the total value locked in Optimism above $1.5 billion.

Optimism Launches Liquidity Mining on Aave

Optimism has launched another round of token rewards.

The Ethereum Layer 2 network announced the start of its latest liquidity mining program on Thursday, which is part of what the network is calling “OP Summer.” The project has allocated 5 million OP tokens to DeFi lending giant Aave for distribution to its users over the next 90 days.

Since the release of the update, users have transferred hundreds of millions of dollars worth of Optimism tokens and deposited them into Aave to earn additional OP tokens. According to Defi Llama, Aave’s deposits on the Layer 2 network have increased by 493% in the last 24 hours. At press time, Aave V3 on Optimism has just under $420 million worth of assets locked in smart contracts.

While Aave’s liquidity mining program is currently the largest on Optimism, it is not the first. Since the Ethereum rollup launched its own OP Governance Token in May, several other protocols have started to distribute rewards. These include automated market maker Velodrome, decentralized swap app Perpetual Protocol, and sports betting app Overtime Markets.

Through the promotion of OP tokens, Optimism has significantly increased its user base and the total value of assets locked in on-chain smart contracts. According to data from L2Beat, the network’s total locked value, excluding its native OP token, has increased by 63% since the launch of the OP token on May 31st. Most recently, the start of Aave liquidity mining increased the total value locked by another 27%. . Optimism currently has a locked total value of approximately $1.51 billion, only trailing Arbitrum’s $2.48 billion in the Tier 2 race.

Optimism is one of the leading Tier 2 projects working on scaling Ethereum. It uses Optimistic Rollups to aggregate transactions and send them back to the Ethereum network for confirmation. Rollups like Optimism offer users significant gas savings compared to transactions on the main network. For example, L2 Fees data shows that the current token exchange value on Optimism is $0.36 compared to $6.49 on Ethereum.

Disclosure: At the time of this writing, the author owns ETH and several other cryptocurrencies.

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