The price of Aave's (AAVE 0.08%) token was rising this morning after an announcement today that Aave cryptocurrency owners will now be able to provide liquidity on the Avalanche decentralized finance (DeFi) platform.
The price of the cryptocurrency spiked on the news and is up by 3.9% over the past 24 hours as of 12:44 p.m.
The head of DeFi at Ava Labs, the developer network for Avalanche's platform, said on Twitter today that Aave's latest version is now available for liquidity mining on the Avalanche blockchain.
Liquidity mining is a term used in the cryptocurrency world when a token owner lends coins to a decentralized network in exchange for rewards.
While it may seem like a small improvement, being able to lend Aave tokens for rewards adds more utility to the cryptocurrency and, as a result, helps increase the potential value of Aave.
Right now, Aave is the 49th-most-valuable cryptocurrency, with a market capitalization of about $2.5 billion.
With so many cryptocurrencies currently out there for users to choose from, crypto owners are looking for anything that can help differentiate their coins from others.
While today's news is good for Aave owners, crypto investors may want to temper their enthusiasm. Crypto prices can be extremely volatile, and despite today's gains, Aave's value has plummeted 52% over the past 12 months.
That doesn't mean the cryptocurrency won't end up being a good long-term investment, but it does mean that while the cryptocurrency market evolves, there are bound to be some large price swings ahead for Aave and other coins.