Maker Dao has the advantage over Aave or Comp due to the fact that it is the issuer of Dai and requires collateral to mint.
This is my understanding. But Iām definitely learning.
The MakerDAO must maintain a maximum of 66.7% LTV. The MakerDAO platform backs the value of Dai the stablecoin soft-pegged to the USD. This lack of price volatility keeps the LTV higher.
The more volatile the currency the lower the LTV, and the higher opportunity for generating yield which is what encourages people to deposit funds into Aave and Compound.
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As of when I checked, Compound and MakerDAO have rougly the same LTV, while Aaveās is lower. This means people are putting up more collateral when borrowing from Aave to reduce the risk of getting liquidated. Itās easy to see why this wouldnāt be as big a concern when stablecoins are involved. It all depends on the nature of the loan.
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Maker Dao is in early inervator on the ETH platform, they have a higher LTV as DAI is backed by collateral on the Maker Dao platform
DAI Stablecoins has been adopted to lots of Apps and services as the ERC20 smart contract usage grew.
Aave and compound offer more tokens and better lending rates in order to compete with other protocols.
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MakerDAO has a higher LTV due to a couple of factors. The first of which is that MakerDAO is closer to the bottom of the defi stack. This means there are daps and protocols that are built on top of MakerDAO which causes more demand for dai. In order to mint dai, collateral is needed, which naturally causes MakerDAO to have a high LTV.
Compound and AAVE have lower LTV but offer better lending and borrowing rates then MakerDAO.
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MakerDAO has a higher collateral requirement so it is less risky and provides less yield, which makes it more attractive to people with certain risk appetites. AAVE & Compound are higher rates, but more risky.
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Aave and Compound have better lending rates and have wider range of tokens.
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MakerDAO has the highest LTV as it has itās own stable coin DAI which is used as collateral to borrow. Choices are very limited with MakerDAO.
Aave and Compound offer better returns and a larger selection of tokens which can be borrowed. This can include flash loans and yield farming.
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MakerDAO has much higher LTV as Dai is a collaterally backed stablecoin. Aave and Compound allows users to access a wider range of tokens with better borrowing and lending rates.
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MakerDAO has much higher LTV maybe because DAI is stable coin and letās say AAVE and COMPOUND have more range of other tokensā¦
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According to the internet, because I have no ideaā¦still learning, Maker DOA has higher LTV because it was the first of its kind and built on ethereum. I, personally, think that it comes down to rates, because who doesnāt like good borrowing rates.
Aave and compound seems to offer more coins to choose from.
Sorry for the lame answer. Itās hard to guess or know when youāre still learning and the light bulb hasnāt gone off yet. Iām sure with more time things will click a little better.
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Great answers here in the forum! They really helped me in trying to understand this topic. So, from what I could tell - Maker has the highest LTV because of using collaterally backed Dai being in demand with multiple dapps and protocols built on top. Compound and Aave have many more coins and better lend/borrow rates but likely to be riskier.
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Maker DAI is lower on the stack and thus has less technical risk. But the others allow more tokens and have better dev APIās. Easy to build on top of higher protocols. Iām building a utility token that deposits USDC reserve on AAVE, because itās expedient.
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Iām here for the responses, because I donāt have any idea why Maker DAO is higher than the other two. Also, not sure on the incentives at play for Compound/Aave vs Maker DAO
Maker DAO seems to have higher LTV ratios than the rest of the protocol I strongly believe that this is due to the DAI stable coin and how the coin has a valid source of collateral to maintain its value also maker DAO was the first platform to offer lending and borrowing and it somehow created a following since its beginning other platforms such as compound and Aave seems to be more riskier and they also offer higher returns for pairs, more features, it seems to me that investors prefer to use Maker DAO for lending and borrowing than Aave and compound probably due to familiarity with the platform and understandability of the DAI stable coin also it is possible that primary investors trust Maker DAOās security than the other platforms due to it being first to do so on the Ethereum blockchain
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Being in the middle of a market meltdown Iām not sure if this are standard value and I can see big differences just in the last few days:
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Aave - LTV on 12/05 is 57% but it looks to be generally below 40% but again with massive fluctuations
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Maker - LTV on 12/05 is 35% but looking at the past it;s generally above 55%
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Conpound - LTV on 12/05 42%, in the past looks to be fairly stable around 35-36%
Lower rates and sophisticated products on Maker allowing higher LTV (liquidation risk still applies)
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I believe MakerDao has the larger LTV than Aave and Compound due the fact it was in the beginning of the defi protocols and has Dai as it stable coin with a more stable collateral. Dai being pegged one to one with USD. Aave and Compound both have more range of tokens and offer different protocols. They do offer a variety of different lending and borrowing rates on top of yield farming.
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i believe the main difference is makerDao has the stablecoin DAI which is pegged to the dollar; these incentives to collaterized any ERC20 token or LP and received DAI in return; then that DAI can be used to boost yield in other protocols such as AAVE, COMP
i think @jak explained better than me.
also it is important to mention that LIDO is right now the 2nd in TVL with 7B:
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The differences between these three protocols may be based on what your invested or staked contributions get you. Aave and Compound allow your investment to be distributed across a variety of different liquidity pools, where Maker is based along the lines of a 1:1 ratio where example 10 ETH would match 10 tokens. Another issue could possibly be the fees that are collected, Maker collects all the fees charged, while Aave and Compound only take 10% allowing a greater portion to go towards liquidity. Finally, as the CEO of TrueFi mentioned, people donāt desire to lock up their assets for long periods of time, they want their money working for them across various protocols.
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well as from someone who just jumped in a year ago for the most part new about maker and curve. pieces from 2017 i learned. maker comes to mind quickly. that being said it is outdated and aave and compound offer more services. as for the interest they can offer better interest using the their own coin as to cover the difference. usdc 11 percent 6 percent compound etc. alchemix sounds super sketchy and super cool at the same time. -my opinion- wait to see how time effects alchemix then ill give it a shot.
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