If you are interested in the data check out the dashboard here (this is the cool stuff) →
If you are interested in the insights check out the below.
Introduction
AAVE V3 was launched earlier this year to better enhance the user experience, increase capital efficiency, increase decentralization, and more features. It currently it is on Fantom, Harmony, Arbitrum, Optimism, Polygon, and Avalanche. In this analysis, we aim to look at the Total Value Locked (TVL) by network and token as well as the historical interest rates. Data is sourced from index AAVE V3 Graph protocols via Subgrounds.
Current TVL
As of current writing, there is over $3.3B locked up in AAVE V3. Over 90% of it is in Avalanche (~50+%) and Optimism. Both of these chain’s dominance of TVL is most likely due to the liquidity rewards they are giving out to AAVE Borrowers/Depositors. It is interesting that Polygon / Arbitrum is so much lower (no liquidity rewards) as it may suggest that AAVE users will flock to the highest liquidity even though both chains have tons of activity. In terms of TVL, the five most popular tokens are USDC, DAI, USDT, ETH, and wBTC. So besides, liquidity Rewards what are the average rates across chains?
Interest Rates
For this first part, the analysis will focus on DAI. Looking at the borrowing and deposit rates, the following insights can be gathered
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Optimism and Arbitrum have the highest rates for DAI at 2.45 and 1.47 %. With Optimism’s current liquidity program, it makes it an ideal place to park capital
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Over the past 30 days, the rates have remained relatively stable. Besides a few days where the rates spiked for Optimism, the rates remained steady.
In addition looking at a few other tokens (USDC, WETH) we can observe the following:
Similar to TVL, Optimism and Avalanche are offering the highest deposit rates for USDC and Optimism has a 1.5% increase in deposit rate over Arbritrum for USDC. From an L2 perspective, it may make sense to choose Optimism, but that could change with Arbitrum Odessy and the eventual removal of liquidity from AAVE Optimism.
Conclusion
After looking at the TVL and rates from the various AAVE V3 markets, we can see that the TVL is heavily dominated by Optimism and Avalanche, mainly due to their liquidity programs. Chains like Polygon and Arbitrum that also have high on-chain activity don’t see nearly as much TVL. Similarly, as seen with the examples of USDC, ETH, and DAI Optimism and Avalanche had some of the best deposit rates because of this. For now, the best place to park capital is Optimism. Only time will tell if these two chains will remain on top, or if another chain will start incentivizing users and draw capital away!