What is Aave (AAVE)? Everything you need to know about AAVE

What is Aave?

Aave is a liquidity-based Lending protocol. Originated as a decentralized peer-to-peer lending platform (ETHLend), Aave revamped to a pool-based one.

Instead of forming a direct relationship between lenders and borrowers, Aave involves the participation of both through liquidity pools, thus diversifying the options and automating the process.

Aave provides borrowers with not only the conventional overcollateralized loans, but also the Flash Loans.

Flash Loans are the first uncollateralized loan option in DeFi. Unlike other overcollateralized loans, Flash Loans do not require any collateral since they allow you to borrow and return the assets in just one transaction block. Flash Loans are extremely useful for arbitrage, collateral swapping, debt swapping, etc. Here is an example of how Flash Loans can be applied:

What is AAVE Token?

AAVE is the native token of Aave in ERC-20 standard. AAVE is regarded as the core of the whole ecosystem, as it is not just used in staking and governance activities. The fact that it is applied as an insurance fund to depositors differentiates the token and the protocol from others.

Aave allowed the migration from ETHLend to Aave by replacing LEND with AAVE at the rate of 100:1. That being said, 13M (out of 16M ) AAVE tokens will be redeemed by LEND token holders. 3M AAVE will be generated for the Aave Ecosystem Reserve.

How does Aave work?

From a lender perspective:

Depositors can provide liquidity to the protocol to earn passive income depending on the market borrowing demand. There are two main profit sources:

• Interest rate: Lenders share the interests paid by borrowers. The APY (Annual Percentage Yield) may vary from different pools.
• Flash Loan fees: Depositors receive 0.09% of the Flash Loan volume.

From a borrower perspective:

Borrowing is a perfect way to utilize your capital. Imagine having an ideal position on one or many tokens. Now if you want to invest anywhere else, there is a chance that you may have run out of funds. To tackle the problem, selling your invested assets was the only solution. Whereas with borrowing in practice, this is no longer the case.

Borrowing can become handy for unexpected expenses, leveraging profits or capitalizing potential  investment opportunities. In return, borrowers only have to pay a small amount of interest rate to lenders.

From a Dapp developer perspective:

Developers can utilise the rich liquidity pools from Aave to implement their products, especially in leveraging features such as leveraged yield farming.

Currently, the Aave ecosystem consists of 3 markets:

• Main market: The primary market of Aave.
• AMM market: Aave supports LP tokens from multiple AMMs (Automated Market Makers) such as Uniswap and Balancer.
• Polygon (Matic) market: Polygon is a side chain of Ethereum. The supported tokens are both Polygon-native and Ethereum-bridged.

In December 2020, Aave was upgraded to its version 2 with a few updates and new features:

• Gas efficiency.
• Architecture simplification.
• Code simplification.
• Debt tokenization. The debt from borrowers is now represented in tokens.
• Flash Loan V2. Aave updated the Flash Loan feature with various add-ons: Collateral Trading, Collateral Repayment, Margin Trading, Debt Swap, and Margin Deposits.
• Collateral Trading: By using Flash Loans, users can swap their collateral.
• Collateral Repayment: Users are able to swap one or multiple assets deposited in the protocol in order to use them to repay the debt completely or partly.
• Credit Delegation: Aave allows delegators (depositors) to deposit funds in the protocol while delegating their credit to other users. This allows the lenders to earn extra yield, and the borrowers to open undercollateralized loans. This is usually seen in institutions where there is a trustworthy belief between the two parties.

Detailed information about Aave Coin 

AAVE Price Today

Currently, you can track the price of AAVE on Coin98 Markets.

Coin98 Markets is a website that helps users to get updates of the real-time prices, as well as view the detailed information of a Token Metric from any project. More specifically, you can access the home page or the community page of a project, or filter the coins/tokens by Market Cap, Trading Volume, etc.

AAVE Key Metrics

• Name: Aave.
• Ticker: AAVE.
• Token standard: ERC-20.
• Token type: Governance, Utility.
• Max supply: 16,000,000 AAVE.
• Circulating Supply: 13,177,230 AAVE.
• Contract address: 0x7Fc66500c84A76Ad7e9c93437bFc5Ac33E2DDaE9.

AAVE Token Allocation

AAVE Token Sale

ETHLend (old Aave) raised $16.2M in an ICO (Initial Coin Offering) in November 2017.

AAVE Token Release Schedule

All AAVE tokens have been released.

AAVE Token Use Cases

Currently, AAVE token has four main use cases:

• Staked in Safety Module to act as insurance.
• Incentives, including Ecosystem Incentives and Safety Incentives.
• Governance. AAVE can be used in AIP (Aave Improvement Proposals) creation and approval.
• Ecosystem Reserve to bootstrap the protocol.

How to get AAVE Token

You can get AAVE by participating in the protocol via lending and staking.

How to buy AAVE Token

You can buy AAVE through:

• DEXs: Uniswap, Sushiswap...
• CEXs: Coinbase, Binance, Huobi...

You can also swap and buy AAVE directly at the Coin98 Exchange interface at the end of this article! Coin98 Exchange is a decentralized exchange (DEX), a Multi-chain liquidity aggregator that offers users a wide variety of DeFi services (swap, stake, lend, borrow...) through intuitive and simple interfaces.

How to store AAVE Token 

You can store AAVE token on Coin98 Wallet with these steps:

Step 1: Open Coin98 Wallet & click Receive on the home screen.

Step 2: Search AAVE Token.

Step 3: Click on the correct result, copy the wallet address and send AAVE to this address.

Aave Roadmap

Team, Investors and Partners

Team

• Stani Kulechov: CEO & Founder.
• Jordan Lazaro Gustave: COO.

Investors

Aave was invested by a wide range of well-known venture capitals, such as ParaFi Capital, DeFiance Capital, Three Arrows Capital,…

Partners

Aave partners with multiple Dapps, including:

Aave also partners with Chainlink to update their price feeds as accurately as possible. This is a must in a Lending protocol as it has a strong effect on liquidations.