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Aave Receives $3 Million Investment from Arrows Capital & Framework Ventures

Aave the DeFi protocol venture entered into a strategic partnership with the leading cryptocurrency community contributors Three Arrows Capital & Framework Venture.

As per Aave’s medium blog, Three Arrows Capital & Framework Venture have taken a stake in the company by investing $3 million and receives Aave’s native token “LEND” in return.

In a token sale, Three Arrows Capital & Framework Venture receives 30 million LEND token, at $0.10 each. At press time, the value of tokens amounts to $7 million.

With this coalition, both the investment firms would be expected to deliver active market participation “in the Aave ecosystem via staking and governance” … and would fuel Aave’s growth both as a “protocol users and investors.”

The strategic association between Aave, Three Arrows Capital, and Framework Venture would be highly effective for Aave to expand its mission on creating an open and transparent financial infrastructure in the DeFi (decentralised finance) protocol.

Three Arrows Capital is one of the largest crypto market partakers in the OTC lending market. The hedge fund founded in 2012 by Su Zhu and Kyle Davies.

The blog while citing a dialogue from Three Arrows Capital mentioned:

DeFi is strongest when it is built by the community for the community with pragmatism and composability. We have been impressed by Aave and are excited to bring our knowledge of the institutional borrow and lending space to work on further growing the decentralized money markets at Aave.

Framework ventures founded in 2019, based out in Toronto, Ontario, Canada. The thesis-driven venture capital firm is one of the most active investors & liquidity providers across the DeFi ecosystem. Earlier, the venture company also helped Kava labs, Synthetix, and Chainlink to grow exponentially.

The Co-Founder of Framework Ventures, Michael Anderson believes that Aave would certainly benefit from the collaborations.

Aave, the Ethereum-based lending protocol company, playing an important role in nurturing the DeFi protocol space by launching new and innovative products like “enabling more assets as collateral, lending features such as credit delegation and partnering with other DeFi protocols.” Anderson notes.

Aave is Different From Compound

LEND token is quite different from the other DeFi tokens like Compound in the cryptocurrency space. With LEND token users can avails discounts. According to Aave, LEND would also be available to be staked for governance and can be used as a defense mechanism for the users in outstanding loans.

Aave, the lending protocol (platform) provider has distinguished features unlike Compound- like uncollateralized loans, rate switching, Flash loan (the most selling points for Aave), and unique collateral types in the DeFi protocol space.

The company has witnessed significant growth in 2020. Interestingly, most of its growth can be seen via the company’s tool “Aave Watch” which facilitates the users to watch key metrics like borrows and fee collection. Also, “Aave Burn” helps to see the fee which has been used to burn LEND off the open market.

Aave aids users to borrow/deposit various cryptocurrencies including stablecoins like among others are Bitcoin (BTC), Ethereum (ETH), Basic Attention Token (BAT), and Chainlink (LINK). 

A significant shift is on the cards in the cryptocurrency investment ecosystem. “The private borrow/lend activity moving to decentralized money market protocols,” Anderson noted.

Reportedly, Aave also received $4.5 million investment from ParaFi- a San Francisco-based alternative investment firm focused on blockchain and decentralized finance markets. ParaFi has also accumulated LEND token in return for the investment. Earlier, ParaFi invested in MakerDAO and Compound. In June the company invested in a popular DeFi protocol Kyber Network to support its planned Katalyst upgrade.