Aave (AAVE) Research

Aave (AAVE) Research Details

Aave (AAVE) Aave

INTRODUCTION

Aave is a Defi cryptocurrency protocol designed for people who want to borrow or give cryptocurrency without central control. Aave uses the Decentralized Autonomous Organization where activity control is shared among its users. Transactions on Aave are successful thanks to ERC20 tokens. These are the same tokens that are used in the Ethereum cryptocurrency. Therefore, it would be fair to say that Aave is built primarily on Ethereum blockchain technology.

Aave token is also connected to Aave, which is an Ethereum token. Owners of this token have the power to vote on company decisions. It can be said that token holders have control over Aave’s management.


HISTORY AND FOUNDER

Aave was launched in September 2017 and was originally known as ETHlend. Aave was created by Satan Kulechov. He was not happy as there were few loan applications built into Ethereum at that time.

In September 2018, the protocol name was changed to Aave.

The first initial coin offering (ICO) was held in November 2017, and $ 16.2 million was collected from the sale of $ 1 billion AAVE tokens(then called LEND), plus an additional 300,000 for investors. By 2020, LEND was replaced with AAVE coins, with each 100 LEND converted to 1 AAVE, resulting in 16 million coins.


REASON TO BUILD THE PROJECT

Aave is designed to address some of the most critical issues facing traditional lending services. As with all DeFi, the main goal of this project was to transform centralized financial services into decentralized services. In the normal course of lending, banks will lend your money and earn interest. Even if they lend you money, you won't have access to that profitable interest income.

In the Aave ecosystem, everything changes. Anyone can lend their cryptocurrency to other users without trust or permission. Interest earned on asset loans is paid directly to your online wallet. In this way, Aave revolutionized peer-to-peer lending and helped create an entire DeFi sector with the same goal.


BASE OF PROJECT

·       Flash Loans- Aave changed the game while introducing a loan on the market. These open-source agreements allow users to take out loans quickly without collateral. Additionally, flash loans should be repaid during the next Ethereum block mining. These fast-paced borrowing processes allow users to accomplish many tasks in a short period of time.

·       aTokens- The revenue function of the Aave protocol is based on the second type of token, known as aToken. These tokens are important to the network because they allow you to earn interest on your loan activities.

·       Interest Rate Switching- Users also get the ease to change the structure of their interest rate. You can choose between stable or flexible interest rates at any time using Aave.

·       Reserves- Aave is also one of the first P2P loan programs to introduce liquidity pool savings. These funds are used to help pools fight market instability.


USE CASE

The use cases of the Aave platform are:

·       AAVE crypto borrowers can take out a free loan when those loans are included in the token.

·       Holding AAVE tokens usually gives users a reduced trading fee on the platform. Borrowers who offer AAVE tokens as collateral for their loans may receive discounts on payments. These borrowers also gain the ability to take out large loans.

·       Holding AAVE crypto gives owners the ability to vote on upcoming proposed changes to the Aave protocol.


TOKENOMICS

Distribution and allotment of tokens include:

·       Main development 30%

·       User experience enhancement 20%

·       Management and Legal 20%

·       Promotions and Marketing 20%

·       Miscellaneous costs 10%

Token Offering: Token was introduced through a sale to the crowd with an initial total of 1.3billion LEND tokens. The initial distribution of AAVE accounted for 23% for founders and project and 77% for investors.


MAJOR NEWS AND EVENTS

DATE

NEWS/EVENTS

IMPACT

16/03/2022

Aave launched its most powerful version of the protocol-V3

+25% Increase

 

18/05/2021

China prohibits financial and payment institutions from offering cryptocurrency services

-53% Decrease


CONCLUSION

Aave has the best technology for those who want to lend and borrow cryptocurrency. Due to the decentralization of the platform, it is unique and superior to traditional banking systems. The Aave interface is also very easy for people to buy which is a huge advantage.

It also has some drawbacks like overspending. This may appeal to some investors as not everyone has a lot of capital to invest in. However, these negatives are not so important that they can outweigh the benefits of Aave - a good open and unlimited open-source protocol.


DISCLAIMER

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto products are currently unregulated and subject to market risk. Please seek independent financial advice or do your own research before investing.