- Aave and Compound saw a decrease in the number of unique users and monthly deposit volume.
- Aave V3 recently saw a spike in TVL, while Compound experienced a steady uptrend.
Aaf [AAVE] and Compound, the dynamic duo of lending and lending platforms that helped pioneer the Decentralized Finance (DeFi) movement, endured a year of ups and downs. How have these two powerhouses fared despite what some are calling a tumultuous time, especially with the introduction of their highly anticipated V3 releases?
Read Aave (AAVE) Price Forecast 2023-24
Deposits, users fall on Aave and Compound
Based on Kaiko’s databoth Aave and Compound saw a consistent decline in unique users since May 2022. Compound’s decline, however, was more striking.
The only two months to show a deviation from this trend were November 2022, which coincided with the collapse of FTX, and March 2023, when USDC decoupled.
In February 2023, user activity reached a particularly low point, with Aave V2 receiving just over 3,500 monthly users and Compound V2 receiving 1,000.
Source: Kaiko
The bear market had a noticeable impact on monthly deposit volume for both platforms. At the start of 2022, Aave saw an average of $8 billion in monthly deposits. In 2023, however, the average fell by half to about $4 billion.
The only exception to this trend was March, when the platform experienced an increase in deposit volume. This was due to the popularity of flash loans, a feature where tokens are deposited and withdrawn in the same block.
These loans accounted for a whopping $10 billion in deposits in just three days.
Aave and Compound’s V3 sees TVL respite
According to DefiLlamas data, Aave V3 was on an uptrend. Although the platform experienced a dip in October 2022, the Total Value Locked (TVL) resumed its advance. At the time of writing, the TVL stood at $1.3 billion, despite a sharp drop between April 20 and April 23.
Source: DefiLlama
Unlike Aave, Compound experienced a relatively stable uptrend in terms of TVL, with the only significant dip in March. The platform’s TVL soared to over $587 million.
In addition, there has been a consistent flow of stablecoins into the system, although outflows are currently dominating.
Source: DefiLlama
– How much are 1,10,100 COMPs worth today
30 days MVRV check
When examining the 30-day market value to realized value (MVRV) of both Aave and Compound, some similarities in valuation emerged. At the time of writing, Aave’s MVRV was -5%, while Compound’s MVRV was -6%.
TThe MVRV suggested that both tokens are currently undervalued and could potentially appreciate in value. Moreover, AAVE was trading at around USD 71 at the time of writing, while COMP switched hands at around USD 40, both down less than 1%.
Source: Sentiment
