The crypto DeFi niche has reportedly seen an upsurge this year, paying users interest on locked funds (collateral), in return for loans. DeFi protocol Aave has reportedly disclosed details of its 2nd version – V2.

Specifically, in DeFi, assets functioning as collateral will reportedly be locked in. V2, however, will make them available for trading activities again, per Aave founder Stani Kulechov. 

“Users can trade their deposited assets, across all currencies supported in the Aave Protocol, even when they are being used as collateral.” 

Numerous fad DeFi protocols and their associated assets have reportedly witnessed an incline, in terms of popularity, during 2020. One project’s asset, YFI, even experienced a dramatic surge, going from under $1,000 surpassing $38,000 this summer. 

The majority of what’s going on across the DeFi sphere reportedly revolves around locking up crypto assets as collateral on platforms, winning interest in exchange for receiving loaned assets, which will be reallocated afterwards. 

Enabling locked assets trading will reportedly further make more measures for liquidation protection available. Moreover, Aave’s version two also promotes numerous different innovations, including advancements on flash loans and the utilization of collateral for loans reconciliation, skipping a few steps and transactions from the process. 

Other updates in V2 include flash liquidations, batch flash loans, debt tokenization, native credit delegation, gas optimization and borrowing-rate variations.

Due to Aave moving its operation to the newly rolled out version, the team has established parameters enabling users to maintain loans throughout the transition.