What is AAVE? Learn about the most prominent DeFi Lending platform

Overview of Aave

What is Aave (AAVE)?

Aave was originally called ETHLend when it launched in November 2017, but the rebranding to Aave happened in September 2018. Aave is a decentralized finance protocol that allows anyone to lend and borrow cryptocurrency.

Aave’s goal

Aave aims to fill the gaps of giants in centralized payments like PayPal, Skrill, and Coinbase. Their main product is Aave Protocol, an open source and unattended protocol for creating currency markets on the Ethereum blockchain.

Core Team

London-headquartered Aave was established in September 2018. Aave co-founders consist of 18 talented and experienced members in the field of startups, including some typical names as follows:

Kulechov – Aave’s CEO

  • Jordan Lazaro Gustave – Aave’s COO
  • Mika Söyring – Aave’s CFO
  • Maria Magenes – CMO Aave’s CMO
  • Ville Valkonen – Aave’s CCO

Advantages of Aave

  • One of the largest projects in terms of total locked cryptocurrency value in its protocol.
  • The project allows people to borrow and lend in about 20 cryptocurrencies
  • Through Aave, borrowers can alternate between fixed and floating interest rates.
  • AAVE is simply designed to suit all levels of users.
  • AAVE token holders can vote for improvements or modify values in the system
  • Allow users to withdraw directly with ETH
  • AAVE high security

Disadvantages

  • Low interest rates
  • Fast loans are a threat to these protocols.

AAVE’s rivals

Compound – an autonomous interest protocol, algorithm built for developers to unlock the universe of open financial applications.

Aave’s operation mechanism

What is Aave protocol?

The biggest and integral aspect of Aave is the launch of Aave Protocol in January 2020. Its transition from ETHLend marks a significant change in the company’s strategy. From decentralized P2P lending to a pool-based strategy, Aave Protocol is an open source, unattended protocol that allows users to create their own decentralized currency market on the Ethereum blockchain.

Liquidity pool

Liquidity providers in AAVE pools aim to get a benefit every time their crypto is borrowed.

This mechanism is an incentive for more and more people needing to pump liquidity, thus providing higher loans and getting higher returns.

Loan security system

Most of these protections are in the Safety Module (SM). It is basically a system responsible for monitoring the correct operation of AAVE and all subsystems attached to the protocol.

Swap in AAVE

AAVE uses groups in Uniswap. This bridge with Uniswap aims to bring Uniswap liquidity assets into the lending space as collateral for AAVE.

Protocol administration

AAVENOMICS is the whole economic policy that will support AAVE with the main idea of converting your existing LEND tokens into new AAVE ones. This conversion will take place at the rate of 100 LEND to 1 AAVE to reduce the circulation of LEND tokens and revalue the AAVE ones.

Upgrade Aave 2.0

Aave 2.0 was announced on August 14, 2020. Here are some of the key new features in Aave Phase 2.

  • Payment with collateral
  • Debt encryption and native credit authorization
  • Improved stable loan rate
  • Private market
  • Cải tiến aTokens
  • Gas charge optimization.

AAVE Ecosystem

Aave’s product portfolio spans multiple industries, technology, finance, and games. Here are some outstanding projects in the AAVE ecosystem:

  • Aave Pocket is one of the first products developed by Aave to serve the freelance economy and micro-industry, eliminate the need for credit cards and bank fees. ETHLend is a decentralized financial marketplace for peer-to-peer digital asset-backed loans that operates on the smart contract-used Ethereum blockchain.
  • Aave Lending is a turnkey solution for the digital asset-backed lending market.
  • Aave Custody acts as a digital asset storage custodian.
  • Aave Clearing is an over-the-counter (OTC) cryptocurrency payment service.
  • Aave Gaming is an innovative game studio focused on creating new game experiences through the use of Blockchain, Smart Contracts and mixed reality.

AAVE token

AAVE is an ERC20 token, the governance token of the Aave ecosystem. AAVE is converted from LEND to AAVE at a ratio of 100:1. The AAVE token is designed for deflation.

Function

  • Use Aave as collateral to reduce lending fees by 50%.
  • Increase loan value by peg in Aave token.
  • Use Aave to pay for ETHLend Premium services.
  • Use Aave to reward the activities of Lenders and Borrowers.
  • Use Aave to reward users who refer ETHLend dApp (End of Q2 2018).
  • Use Aave to vote for features or choose a new collateral type on ETHLend.

Some basic information about the AAVE token

  • Token name: AAVE TOKEN
  • Ticker: AAVE
  • Blockchain: Ethereum
  • Token Standard: ERC-20
  • Contract address: 0x7fc66500c84a76ad7e9c93437bfc5ac33e2ddae9
  • Supply of circulation: 12,133,607
  • Total supply: 16,000,000 AAVE

Token Allocation

Total supply: 16,000,000 AAVE

  • 13 million AAVE will be redeemed by LEND holders.
  • 3 Million AAVE will be allocated to the Aave Ecosystem Reserve.

AAVE Token storage wallet

AAVE is an ERC-20 token, so you can store it on wallets that support this standard such as:

  • Metamask
  • Myetherwallet
  • Trust Wallet
  • Atomic Wallet

Buy, Sell and Trade Aave (AAVE)

Some of the largest exchanges listing the AAVE token include CoinDCX, Binance, CoinBene, and OKEx. Tokocrypto, CoinTiger and FTX.