- The company is using Aave to optimize liquidity, manage treasury, and build innovative DeFi products.
- The development signals the prevailing institutional shift towards DeFi.
- AAVE has gained more than 5% on the news.
Altcoins remained on the radar as they continue to outperform Bitcoin after the September 17 interest rate cut.
Amidst the optimism, publicly listed Galaxy Digital has confirmed significant integration with Aave, a leading lending protocol.
The financial services company announced that Aave is key to its strategic operations, including treasury undertakings, trading, and lending.
The approach aims to reduce dependence on centralized liquidity providers and enhance capital efficiency.
According to Galaxy’s Head of Lending, Max Bareiss:
Aave’s native token rallied after Galaxy’s announcement, which testified to DeFi’s increasing institutional appeal.
Borrowing against top assets
The firm primarily uses Aave to borrow stablecoins against established assets like Bitcoin and Ethereum.
Leveraging a permissionless network allows Galaxy to escape slow authorization procedures seen in CeFi.
That enables its trading desks to access massive liquidity instantly.
Meanwhile, the firm uses the borrowed capital to support balance sheet liquidity, institutional lending, and client trading activities.
That gives Galaxy a competitive edge in the fast-paced blockchain markets.
Furthermore, Aave serves as Galaxy’s credit facility, with its thriving lending pools supporting flexible credit and bridge loans.
The blockchain’s accommodative interest rate mechanism allows the company to manage borrowing costs according to market conditions.
That gives Galaxy transparent and predictable access to massive liquidity, which is vital for running lending operations and institutional trading.
Aave’s stablecoin unlocks new utility
Besides borrowing, Galaxy taps the GHO stablecoin to generate yield from idle capital.
The Nasdaq company converts its unused stablecoin into sGHO to earn interest via the AAVE Savings Rate.
sGHO is GHO’s yield-bearing version.
With that, Galaxy can maximize treasury efficiency with readily available liquidity.
Meanwhile, Aave’s gains traction due to its capabilities.
Besides transparency and scalability, 24/7 liquidity, yield options, and institutional compatibility have cemented the network’s status as a reliable DeFi project.
AAVE price outlook
The native token performed well today, up over 5% on the daily timeframe.
It is trading at $309, with a nearly 40% surge in trading volume, indicating optimism.
Technical indicators suggest continued gains for the alt.
AAVE hovers well above the 50- and 100-EMAs on the weekly chart.
That shows buyers control the current momentum.
The 1D Moving Average Convergence Divergence confirms trend shifting to the upside.
Moreover, the Relative Strength Index of 49 means room for further AAVE gains.
Stability above $300 can clear the way to the key resistance at $415, above which Aave could soar past $600.
Source: https://coinjournal.net/news/galaxy-digital-confirms-leveraging-aave-for-capital-efficiency-and-next-gen-defi-solutions/
