Aave

What is Aave (AAVE)?

AAVE is the native token of the protocol of the same name. If you are wondering what the current price of AAVE is, check out the AAVE price chart above. The DeFi protocol revolves around lending and borrowing crypto assets.. Flash loanswhich have been described as the first uncollateralized lending option in the DeFi industry. one of Aave’s signature products.

How does the lending and borrowing process work? Essentially, lenders place their crypto assets into liquidity pools specifically designed for this purpose. In this way, lenders can profit from either the interest paid on the loans or the fees on the term loan.

Once the assets are placed in the pools, they can be used as collateral by borrowers seeking term loans that they will eventually have to repay as part of the same transaction.

Borrowers also have the ability to choose between a fixed or floating interest rate. Fixed rates provide some price stability when the cryptocurrency market begins to fluctuate. On the other hand, variable rates are beneficial when the borrower anticipates an upcoming price drop.

With the Aave v2 protocol update, the protocol introduced several new features, including collateral exchange functionality and collateralized loan repayment. Collateral exchange allows users to exchange their collateral for another supported asset at any time. Secured loan repayment allows borrowers to pay off their secured loan balances in full in one transaction.

The price of AAVE tends to fluctuate widely, which increases its volatility. However, this is a given, since the volatility of the entire crypto market affects the prices of most crypto assets.

History of Aave

When it first debuted in 2017, the name of the protocol was ETHLend. However, in 2018 it was renamed Aave. Aave is a Finnish word meaning “ghost”, which explains the appearance of the little ghosts that can be seen throughout the Aave website. Additionally, it illustrates the company’s transparency and openness. The main reason for rebranding the protocol was to move beyond lending ETH tokens..

The founder of Aave is Stani Kulechov. He is a serial entrepreneur and an early developer of blockchain technology. Stani Kulechov started programming when he was still a teenager. In addition, he studied at the Faculty of Law.

Since its launch, the AAVE token has proven to be unstable. In 2021, AAVE’s price has ranged from $85 at its lowest level to $666 at its highest level, with frequent movements up and down almost daily.

Purpose of AAVE Tokens

AAVE tokens have three main purposes:

• Governance token. AAVE owners can vote on decisions regarding protocol development;
• Reward for bet. AAVE tokens can be earned through staking. Users can either directly stake AAVE tokens or BPT (Balancer Pool Tokens) to earn AAVE;
• Mitigation Tool. The AAVE rate serves as an insurance policy that will cover any shortcomings.

AAVE Tokenomics

AAVE tokens are deflationary, meaning they have a fixed supply of 16 million tokens. Since AAVE coins are burned whenever the system charges a fee, the circulating supply correlates with the fixed supply. If you are planning to purchase AAVE coins, you should analyze the AAVE price chart.

In 2017 AAVE Initial Coin Offering (ICO) took place, during which one billion AAVE coins were sold. In this way, about $16.2 million was collected. The AAVE price during the ICO was $0.0162. After the ICO, 23% of AAVE supply was dedicated to the protocol and its founders.

AAVE tends to follow the trends set by major cryptocurrencies such as Bitcoin (BTC) And Ethereum (ETH). Therefore, before purchasing an asset, carefully study the current AAVE price and its fluctuations. You should also keep an eye on overall market sentiment.