Incentives work. Or at least they do in terms of wooing DeFi protocols to deploy on other blockchains.
Case in point, Curve Finance, the automated market maker, and Aave, the leading DeFi lending project, have each deployed their offerings on Avalanche as a part of the blockchain’s $180M incentive program called Avalanche Rush.
It’s the first time Aave has ported to a chain other than Polygon, which bills itself as a scaling solution particularly for Ethereum, DeFi’s leading blockchain in TVL terms.
Aave already ranks first in terms of total value locked (TVL) at $1.26B on Avalanche, according to DeFi Llama. Trader Joe, an Avalanche-native decentralized exchange (DEX), trails Aave in TVL, by only $180M. Curve is fifth in Avalanche’s TVL rankings at $274.26M.
Avalanche’s overall TVL has skyrocketed to $4.55B as of Oct. 6, a figure more than 14 times larger than it was on Aug. 18 when Avalanche Rush was announced.
The incentive program distributes rewards in the blockchain’s AVAX token to Avalanche-native projects like BENQi, another lending protocol, and Trader Joe, as well as to those native to other blockchains like Ethereum. In addition to Aave, and Curve, the DEXs, SushiSwap and Kyber Network, are also a part of the Rush incentive program.
“It’s critical to bring these projects to Avalanche,” Luigi D’onorio DeMeo, director of DeFi at Ava Labs, the a16z-backed company that develops Avalanche, told The Defiant. “But it’s also just as important to support native projects as well like Trader Joe, BENQi and Pangolin, which I think has been a key differentiator for users when they land on the Avalanche side of the bridge.”
BENQi, a lending protocol, and Pangolin, a DEX, are both native apps to Avalanche. DeMeo informed The Defiant that while Aave’s and Curve’s established brands drew headlines the majority of the AVAX incentives would go to Avalanche-native projects.
“There are many applications already deploying on the network on their own like Instadapp, Barnbridge and a large number reaching out eager to join Avalanche Network,” DeMeo added.
Aave users will receive $20M in Avalanche’s AVAX tokens for borrowing and lending and Curve users $7M in the tokens in exchange for providing liquidity, according to the document outlining Avalanche Rush.
On Aave’s Avalanche deployment, the highest reward for lending is 4.59% on Oct. 6. This goes to people who deposit the AVAX token in the protocol.
There are three pools available on Curve’s Avalanche deployment. In terms of volume, the leader is a pool of three dollar-pegged aTokens, which are interest-bearing tokens representing deposits in Aave’s lending pool. The pool has generated $17.1M in volume in the last 24 hours, far more than the $5.4M the same aToken Curve pool generated on Ethereum on Oct. 6. The difference may be because there are 20 functioning pools on Curve’s Ethereum deployment as opposed to the three on its Avalanche deployment.
With the recent momentum, Avalanche sits in sixth place in the TVL rankings, trailing Polygon, which has $4.67B in TVL.
Not too shabby for a blockchain which had $312.2M in TVL on the launch day of its incentives program. Proof again, that incentives work in DeFi.