Balancing TVL Gains with User Retention Challenges
The innovations in Aave’s lending protocol, including variable and stable interest rate options, have positively impacted its investment value by growing TVL across networks like Ethereum, Polygon, and Base. A higher TVL reflects increased capital inflows, enhancing Aave’s market position. Yet, user stickiness is a mixed bag—while flexible rates appeal to sophisticated users, the complexity might deter casual participants, potentially limiting long-term loyalty. Investment value rises with TVL, but sustained growth depends on simplifying access to boost retention.