Aave (AAVE)

What Is Aave (AAVE)

Aave is a decentralized lending system that allows users to lend, borrow and even earn interest on cryptocurrency assets without the need of a middleman. It can be perceived as this money market running on the Ethereum blockchain, which is a system of smart contracts which enables its assets to be managed by a distributed network of computers that actually run its software. As an Aave user, you won't really need to trust an institution nor a person to manage your funds and data. All you have to do is trust that its code will execute the way it was written. Furthermore, the Aave software goes as far as to be able to create lending pools that enable users to lend or borrow different cryptocurrencies. 

Discussing its history, the unique part about Aave is the fact that it was previously called ETHLend when it was founded in the year 2017, specifically in November. In September of 2018, it was rebranded to Aave. In October of 2020, the native token AAVE was launched as one of the initiatives for it to become self-governed. When it launched, the AAVE price sat at around the $40 USD mark at more than a single exchange. Since then, its circulating supply has grown tremendously as well as its liquidity and market cap.

Supply Information

Aside from the market cap and liquidity, we will need to discuss the circulating supply volume of AAVE, which is currently at 12,796,464.94 AAVE. Keep in mind that it has a maximum supply volume that is capped at 16,000,000 AAVE based on analytical information. 

Who Are the Founders of Aave

Let's dive a little bit deeper into the history of Aave, or its predecessor ETHLend, which was founded by Stani Kulechov. You see, Kulechov had an issue and was extremely frustrated with the fact that, well, Ethereum didn't really have many lending applications, if any, and his project was even built before the rise and creation of Decentralized Finance (DeFi). 

If you're interested in learning more about him, well, he's a serial entrepreneur who went to law school and started programming as a teen. So, there you have ETHLend, which had its native token LEND after its initial coin offering (ICO) raised $16.2 million USD. Kulechkov had a vision of creating a platform that could connect cryptocurrency lenders and borrowers and match loan requests with specific offers. Now at this time, ETHLend wasn't really in a good financial situation, so in 2018 he readjusted his focus and revamped it into the project that we all know today as Aave.

What Makes Aave Unique

The Aave network can be seen as a system of lending pools where users deposit funds that they intend to lend that are then collected into a pool. The borrowers have the ability to draw those pools when they take out a loan. The tokens can be traded or transferred in the way the lender wants to. In order to do this efficiently, the Aave protocol takes advantage of two types of crypto tokens. First, you have the aTokens, which are issued to lenders so that they can collect interest on deposits, and then you have the AAVE token, which is the native token on the blockchain. 

The AAVE cryptocurrency gives its holders many advantages. The borrowers that hold it don't get charged a fee if they take out a loan denominated in the token, for example, and those who use it as collateral can even get discounts on the fees. Then you have what is known as Flash Loans which take advantage of a specific feature across all blockchains, which is that transactions can only finalize when a new bundle of transactions is accepted by the network. 

As such, adding each new block takes time; however, flash loans do things differently. Specifically, a borrower can request funds from Aave, but they have to pay back those funds and a fee with the same block. When the borrower does not do this, the entire transaction is canceled, and no funds are even borrowed, and no trading of coins occurs. 

Where Can I Buy Aave Coin

If you want to buy, sell or trade Aave coins with USD or other cryptocurrencies, you can do so on the following crypto markets: Binance, Huobi Global, Coinbase Exchange, FTX, Gate.io, Kraken, KuCoin, Uniswap (V2), Gemini, Bitfinex, Bitstamp, Bithumb, Poloniex, KuCoin, Bittrex, OKEx, Balancer, Bancor Network, LBank, BigONE, Crypto.com Exchange, 0x Protocol, ProBit Exchange, and CoinDCX. Choosing which crypto market you will be using is up to you, but ensure you select one with the highest number of liquidity providers and that has the current price of the coin exactly in the form of USD.