- OP token liquidity mining is now active in Optimism version of Aave.
- Since the update was released, deposits on Aave on Optimism have increased by 493%.
- The liquidity mining program has also helped boost Optimism’s total value to over $1.5 billion.
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A new liquidity mining program at Aave helped push the total value locked in Optimism over $1.5 billion.
Optimism launches liquidity mining on Aave
Optimism started another round of token rewards.
The Ethereum Layer 2 network was announced the launch of its latest liquidity mining program on Thursday, part of what the chain calls “OP Summer.” The project has allocated 5 million OP tokens to DeFi lending giant Aave for distribution to its users over the next 90 days.
Since the update was released, users have bridged hundreds of millions of dollars worth of tokens with Optimism and deposited them into Aave to earn additional OP tokens. According input from Defi Llama, Aave deposits on the Layer 2 network have increased by 493% in the last 24 hours. At the time of publication, Aave V3 on Optimism has just $420 million worth of assets locked in its smart contracts.
While the Aave liquidity mining program is Optimism’s largest so far, it is not the first. Since Ethereum Collection released its native governance token OP in May, several other protocols have been launched incentive distribution. Among them are the automated marketing company Velodrome, the decentralized exchange application Perpetual Protocol and the sports betting application Overtime Markets.
Thanks to OP token incentives, Optimism has significantly increased its user base and the total value of assets locked in smart contracts on the chain. According L2Beat datathe total value of the network, excluding its native OP token, is locked increased 63% since the OP token was released on May 31st. More recently, the launch of Aave liquidity mining pushed the total value to lock up an additional 27%. Optimism currently holds about $1.51 billion in total value locked up, trailing only Arbitrum’s $2.48 billion in the Layer 2 race.
Optimism is one of the top Layer 2 projects working to scale Ethereum. It uses Optimistic Rollups to combine transactions and send them back to the Ethereum mainnet for confirmation. Aggregation like Optimism offer users significant gas savings compared to mainnet transactions. For example, L2 end details shows that the current cost to exchange tokens on Optimism costs $0.36 compared to $6.49 on Ethereum.
Disclosure: At the time of writing this piece, the author owned ETH and many other cryptocurrencies.