Users of Optimism lending and borrowing assets on Aave via the Ethereum Layer 2 Blockchain are now able to earn additional OP token rewards. OP token liquidity mining is now active in the Optimism version of Aave. Since the update was released, deposits to Aave on Optimism have increased by 493%.
Ethereum users flock to Optimism
Optimism has launched another round of token rewards. The Ethereum Layer 2 network announced on Thursday the launch of its latest liquidity mining program, which is part of what Blockchain calls “OP Summer.” The project has allocated 5 million OP tokens to DeFi lending giant Aave to be distributed to its users over the next 90 days.
Since the update was released, users have linked hundreds of millions of dollars of tokens to Optimism. Staked them to Aave to earn additional OP tokens. According to data from Defi Llama, Aave deposits on the Ethereum Layer 2 network have increased by 493% in the last 24 hours. At press time, Aave V3 on Optimism has just under $420 million in assets locked in its smart contracts.
The Aave liquidity mining program is the largest ever on Optimism. However, it’s not the first. The Ethereum rollup released the native OP governance token in May. That’s why several other protocols started rolling out incentives. These include automated market maker Velodrome, decentralized clearing app Perpetual Protocol, and sports betting app Overtime Markets.
Optimism boosts TVL with token incentives
Optimism has significantly increased its user base and the overall value of assets locked in on-chain smart contracts thanks to OP token incentives. Excluding the native OP token, the total locked value of the network has increased by 63% since the OP token was launched on May 31, according to L2Beat data. More recently, the launch of Aave liquidity mining has increased the total locked value by another 27%. Optimism currently holds approximately $1.51 billion in total locked value (TVL). It’s trailing $2.48 billion in Arbitrum’s Tier 2 race alone.
Optimism is one of the leading Tier 2 projects working to scale Ethereum. It uses Optimism Rollups to aggregate transactions and send them back to the Ethereum main net for approval. Aggregations like Optimism provide users with significant gas savings compared to trading on the main net. For example, L2 fee data shows that the current cost of exchanging tokens on Optimism is $0.36 compared to $6.49 on Ethereum.
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