Why Aave’s Cryptocurrency Is Skyrocketing Today

What happened

Aave‘s ( AAVE 0.27% ) token is soaring again in today’s trading. The cryptocurrency was up roughly 22.9% over the previous 24-hour period as of 3:15 p.m. ET Friday.

The digital token has been skyrocketing following the rollout of new features to the Aave blockchain network. Its cryptocurrency is now up 58.7% over the last week of trading.

Image source: Getty Images.

So what

Aave recently rolled out the version 3 (v3) upgrade for its network, introducing improvements for its decentralized-finance (DeFi) services. Aave v3 has implemented “portals” features which allow for assets to be moved between any blockchain with Aave compatibility. The update also introduced isolated-markets services and a high-efficiency mode to improve functionality and the overall user experience. The enhancements appear to be attracting the attention of some crypto whales and crypto investors in general.

Now what

Aave now has a market capitalization of roughly $3.5 billion and ranks as the 47th largest cryptocurrency by valuation.

With the new improvements and feature rollouts, the fundamental valuation case for Aave appears to be improving and driving increased investor interest in the token. If its network continues to improve and build the user base for its DeFi services, that could help to push its cryptocurrency significantly above current pricing levels. However, investors should keep in mind that the token will likely continue to be impacted by pricing moves for the broader crypto market, and it could see volatile pricing swings unrelated to the network’s underlying services. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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