Aave - Lending and Borrowing in the Crypto World
Aave is one of the most popular protocols in crypto
Concise Crypto
April 24, 2023
Aave (AAVE)
What is Aave?
Aave is a lending protocol built on the Ethereum network that doesn’t need a middle-man or third-party to approve transactions. It can be used to lend or borrow many different tokens, like ETH, DAI, MANA, USDT, and more. These tokens can then be used to participate in other decentralized finance (DeFi) protocols. Lenders gain interest over the assets they deposit into a pool, while borrowers must deposit collateral to take loans and pay interest over time. Aave is a unique way to offer traditional financial products in the crypto world.
Why does Aave have value?
Aave allows crypto asset owners to deposits their assets into a pool and earn interest while it also allows borrows to access assets and then utilize those in a variety of other DeFi applications. Think of Aave as a traditional fintech lending protocol that cuts out the middle-man and rewards asset owners for providing liquidity. It also allows anyone to borrow funds without complicated and unfair eligibility requirements.
What are the benefits of Aave?
● It’s one of the most popular lending protocols in the ecosystem.
● All borrowing and lending is done through smart contracts.
● There are different ways to earn staking rewards in the platform.
● No need for complicated eligibility requirements to take out a loan.
What are the disadvantages of Aave?
● Low interest rates for lenders.
● You have to overcollateralize if you want to take out a loan.
The Aave Crypto App
What are Aave’s tokenomics?
The total supply of AAVE is 16 million, and there are 14 million currently in circulation. This number depends on the Total Value Locked (TVL) on the platform, which refers to the amount of tokens users have deposited in the lending pools. A part of the fees, paid in AAVE, are burned to reduce the supply.
Who founded Aave?
Stani Kulechov.
Who are Aave’s investors?
Aave has conducted 9 funding rounds, raising $49 million. Its major investors are Caesar Chad, James Sowers, Ganesh Kompella, Genesis One Capital, Blockchain Capital, Standard Crypto, Blockchain.com Ventures, Three Arrows Capital, Framework Ventures, and ParaFi Capital.
Concise Crypto Grade
B: Aave is an interesting project that aims to offer very useful features in the lending and borrowing vertical. However, low interest rates for lenders sometimes aren’t worth the risk in providing liquidity. From the borrowers side, you have to overcollateralize any loan that you take out so unless you have a profitable DeFi trade and aren’t afraid of getting liquidated because of crypto volatility it might not be worth borrowing from Aave.
Where can I buy Aave?
Binance, Coinbase Exchange, KuCoin, Kraken, Bithumb, Bitstamp.
What ecosystem does Aave run on?
Ethereum