The demand for AAVE increases as loan interest rates exceed 1 billion USD.

* AAVE falls 20.69% in the past 24 hours.

• The accumulated interest from AAVE borrowers on Ethereum has surpassed 1 billion USD.

A significant milestone for the AAVE network has been set as the interest accrued from borrowers has reached a new record high.

According to data from Token Terminal, AAVE borrowers have paid over 1 billion USD in interest on Ethereum. This strong increase is a sign that trading volume, user demand, and protocol usage are on the rise, while also reflecting the maturity of the DeFi space.

Source: Token Terminal

What does this mean for the network?

The increase in interest rates from AAVE borrowers has significant implications for the network. First, this indicates strong confidence in AAVE, especially in the smart contracts and liquidity of the network. As interest rises, AAVE is witnessing very high activity in trading pools. This also means that liquidity providers for AAVE are earning substantial profits, driving new deposits.

On Monday, the increase in installment fees is crucial for the revenue and sustainability of AAVE. Notably, AAVE earns a significant portion of its revenue from interest, meaning that this network is generating substantial income. This not only supports the sustainable development of the protocol but also adds value to the Token.

The increasing trust from users and liquidity providers opens up more development opportunities. This makes the protocol more attractive to investors.

Could this drive the price of AAVE?

Although AAVE is experiencing increased demand and activity, this has not yet been clearly reflected in the price chart. In fact, this altcoin is under strong downward pressure.

Source: Messari

That's not all.

In fact, this altcoin is experiencing a significant fall in both the Futures and Spot markets. For example, the number of Futures trades has decreased to 917.23K the previous day. When the number of Futures trades decreases, it means fewer traders are opening positions.

This is a sign of strong insecurity as uncertainty increases. This often leads to investors being more cautious, avoiding investments to guard against losses.

Source: Messari

This behavior of the market, with investors sitting still, is further evidenced by the fall in the Futures buying volume of AAVE. This index dropped to 116.65 million after a previous increase. Therefore, fewer traders are willing to buy the asset, leaving the market open for sellers.

In summary, sellers have outnumbered buyers, leading to a sharp downward trend on the price chart. At the time of writing, this altcoin is trading at 117 USD after a 20% fall in the past 24 hours.

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