Aave ($AAVE) (founded 2017) is a DeFi (Decentralized Finance) lending protocol that allows users to borrow a wide range of cryptocurrencies, with the option to use both stable and variable interest rates. The lending Decentralized Application (DApp) allows for borrowers and lenders to ‘opt the terms and conditions for loans.’ Said loans are held within smart contracts. In late 2020 the community changed the tokens from LEND to AAVE.
Overview of Aave – $AAVE
Aave was founded by Stani Kulechov in 2017 under the name ETHLend, one of the first lending applications that were built on the Ethereum blockchain. The Company switched to its current name not long after, after wanting to expand beyond Ethereum (ETH) and start lending other cryptocurrencies.
The name “aave” comes from a Finnish word that means “ghost” in English. According to their about page, “the ghost represents Aave’s focus of creating a transparent and open infrastructure for decentralized finance.”
On January 7, 2020, Aave launched ‘Aave Protocol’, an open-source non-custodial protocol that allows the creation of money markets. It has 16 different assets; 5 of which are stablecoins. Within the first month of its debut, the protocol reached over 5 million USD in liquidity. It features a money lending market that is similar to Compound but focuses more on reusing locked assets within Ethereum’s ecosystem. It also features flash loans, which are a tool that allows developers to borrow liquidity from the protocol without needing to add collateral, “provided that the liquidity is returned to the protocol within one transaction (a single block).” Aave also stands out for its ability to tokenize deposits as ‘aTokens’, which garner interest in real-time. Those who deposit earn interest while also adding liquidity to lending pools. Some of its Aave interest-bearing tokens, or ‘aTokens’, include LEND, Ethereum, DAI, USD Coin, TrueUSD, Basic Attention Token, Chainlink, and 0x Coin.
Aave initially debuted its LEND token in 2017. The native token is used for protocol governance, but can also be staked for insurance as a way to earn protocol fees and AAVE rewards. In late 2020, the tokens community voted to change the ticker symbol to AAVE. The cryptocurrency operates on the Ethereum platform. It has accumulated a market size of over $1.8 billion. On October 29, 2020, Aave officially transferred governance to token holders. This move brings the firm a step closer to decentralization on the platform, something they have continuously pushed for.
How to Buy Aave – $AAVE
How do I buy Aave – $AAVE Token?
While some cryptocurrencies, including bitcoin, are available for purchase with U.S. dollars, others require that you pay with bitcoins or another cryptocurrency.
To buy cryptocurrencies, you’ll need a “wallet,” an online app that can hold your currency. Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies such as bitcoin or Ethereum. Here’s more on how to invest in bitcoin.
Coinbase is one popular cryptocurrency trading exchange where you can create both a wallet and buy and sell bitcoin and other cryptocurrencies. Also, a growing number of online brokers offer cryptocurrencies, such as eToro, Webull, and Sofi Active Investing. Robinhood offers free cryptocurrency trades (Crypto.com is available in most, but not all, U.S. states).