Aave (AAVE) Live Price

What Is Aave (AAVE)?

Aave is a decentralized lending protocol for individuals without a bank account. The platform fills a vast gap in the banking ecosystem by leveraging (DeFi) for permissionless banking and financial services. 

Initially ETHLend, the protocol rebranded to Aave (‘ghost’ in Finnish) in 2018. Recently, it upgraded to its v2 edition, introducing the concept of flash loans. 

This DAO-based (Decentralized Autonomous Organization) protocol converts the depositor’s digital assets into massive crypto pools. The accumulated pool, in turn, provides the required sum to borrowers in an under-collateralized or over-collateralized fashion.

‘AAVE’ is the native governance token used on the lending platform. It is responsible for initiating flexible loans with fixed and varying interest rates.

History of Aave

Aave is the brainchild of developer Stani Kulechov. The Finnish developer launched the project in January 2017 as a solution to bridge the lack of Ethereum-based lending applications. 

Kulechov is an early adopter of the Blockchain space. Before being a serial entrepreneur, Stani went to law school and started his career in programming as a teenager. 

He was one of the initial crypto industry innovators and wanted to revamp ETH-based Blockchain to access better features and functionalities. 

Aave price

At the time of its launch, the ICO event for Aave raised $16.2 million, at $0.0162 apiece (for 77% of the project).  The remaining 23% of tokens were assigned to the founders and project. Later, the protocol managed to raise another $17.86 million for round two in 2017.

Besides, the protocol also arranged for a token swap event while rebranding from ETHLend to Aave. Holders of the LEND token were provided with the new ERC-20 token at a 1:100 ratio. 

The latest swap and the revised deflationary model for the protocol pushed the market valuation and added a total supply of 16 million AAVE. 

How AAVE Works

The entire concept of Aave revolves around a pool-based lending strategy (changed from P2P lending). It would initially require borrowers to deposit some of their digital assets to raise a loan from the protocol. 

Post the v2 update, the protocol serves as a profitable lending model for lenders and borrowers. Lenders earn interest on deposits into the specially-created liquidity pools, whereas borrowers get access to loans with flexible interest rates.

This way, Aave eliminates the need for borrowers to acquire significant funds without having access to such large digital assets beforehand. 

What Makes Aave Unique?

Per the latest v3 updates over the protocol, the cross-chain “portals” and access to isolated markets give Aave a leading edge over other DeFi protocols. In addition, the possibility of users creating their ‘aTokens’ opens up the possibilities of on-chain trading.

Besides, it’s flexible lending offerings make the protocol unique. It has over 30 pools of Ethereum-based assets, including stablecoins, DAI, USD Coin, Tether, and Gemini dollar.

In addition, the protocol also provides pools for real-world assets like freight invoices, real estate, cargo, and payment advances. 

The flexible lending terms, interest rates, and access to multiple lending offerings make it unique. 

How Are New AAVE Tokens Created? 

Stalking is a primary means to create tokens over the AAVE protocol.  It rewards over 550 new tokens per day, split between stakers and contributors of the platform (as per their contribution). 

Besides, as mentioned earlier, the v3 update allows users to create ‘aTokens.’ These tokens represent ‘deposits’ over Aave on one chain and are burned on another.