Aave AAVE Price

Features of Aave:

• The protocol is designed as a set of smart contracts on the Ethereum blockchain. Smart contracts provide security and no intermediary is necessary.
• User funds are not controlled by a third party and the process is fully decentralized.
• With the Aave token, you can get a discount on the interest on loans or increase the interest on a deposit, among several other advantages.
• There is an insurance fund that will collect a small portion of the pool's income to cover losses in the event of liquidation issues.
• Aave provides term loans: these are credits that need to be paid back within a short time.

AAVE Overview

Aave's Operating Principles

Owners of digital assets can participate as depositors or borrowers. Depositors contribute digital coins to the pool, so they are lenders. On the other side of the platform are borrowers, who can request a cryptocurrency loan and get it very quickly.

To borrow cryptocurrency, you need to deposit another one, the total value of which must be higher in dollar equivalent. Additionally, you pay an interest rate, which is based on the supply and demand ratio of the borrowed asset.

Borrowers must always monitor that their collateral has not been liquidated. This happens if the value of the collateral along with the accrued interest is less than the value of the borrowed cryptocurrency.

Aave's History

• In 2017, this platform was launched under the name ETHLend; in November, they held an ICO that raised $600,000.
• In September 2018, it was rebranded because of the addition of new features, in particular, operations with Bitcoin.
• In 2019, the developers abandoned the system of P2P approvals of loan agreements and launched a pool of decentralized assets. Lenders became liquidity providers, generating passive income without having to keep track of payments and liquidations, and borrowers became able to deposit collateral into the protocol and receive loans instantly.
• In 2020, LEND tokens in the amount of 1.3 billion units were converted into cryptocurrency coin AAVE at a ratio of 100:1.
• In 2021, the project managed to establish itself among the leaders of the crypto market when it comes to providing users with credit funds.
• In 2023, Aave's DeFi-platform will begin the first phase of a "rescue mission" for tokens lost as a result of being sent to incorrect smart contracts. This proposal has received a 100% support vote.

AAVE's Roadmap

Aave Interest Rates

Aave offers two types of interest rates: stable and floating. A floating interest rate is calculated automatically based on the pool utilization rate (in other words, demand), with an increase in the pool utilization rate leading to an increase in interest rates for both lenders and borrowers.

The stable interest rate is the average interest rate on an asset over the past thirty days. You can view your interest rate history the moment you make or take a loan on the platform. You can switch between stable and variable rates at any time (you will only have to pay a small ETH gas fee).

Aave Pay

With the Aave Pay app you can make payments in fiat currency, which is converted into cryptocurrencies at the average exchange rate. The app allows you to pay in U.S. dollars, euros, and British pounds. In addition to the pool tokens, you can pay in Bitcoin, Ethereum and other major altcoins.

Advantages and Disadvantages of AAVE

At the moment Aave is quite successful, but still has some weaknesses.

Summary

Aave's main advantage is its maximum decentralization. Unlike its competitors, this lending platform does not represent a regulated body, storing users' funds and transmitting reports to the authorities, but offers the possibility to perform financial transactions confidentially and with a minimum of risk.

When compared to other DeFi lending protocols, Aave offers a bundle of features, assets and development tools that allow other developers to implement the same features in their own projects.