Summary:
- What is The AAVE Platform and how does it work?
- Advantages of the AAVE exchange.
- AAVE’s past, present and future price positions.
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The AAVE Platform
Aave is a decentralised finance (DeFi) protocol that allows people to both borrow and lend cryptocurrencies. Lenders are able to earn interest through the depositing of digital assets into liquidity pools that are specially created. Borrowers are able to use their cryptocurrency as collateral to take out a flash loan by using this liquidity.
Aave (meaning “ghost” in Finnish) was, at first, known as ETHLend when it was first launched in 2017, however ETHLend was rebranded in september of 2018.
AAVE provides its holders with discounted fees on the platform, and in addition, it also serves as a governance token, this gives the owners a say in the protocols future development.
The governance aspect of the protocol works in the following way:
- Users can submit an Aave request for comment (ARC): thereafter discussions between users will commence and feedback will be given and received.
- Create a snapshot: the snapshot offers a way for community sentiment for a new proposal to be gauged.
- Submit an Aave request for improvement (AIP): the proposal is to be submitted through a GitHub pull request and the community will vote on approvals.
The current market capitalization of AAVE is more than $862 million, with a maximum supply of 16 million AAVE tokens, there are currently almost 14 million of them currently in circulation.
What makes AAVE’s unique?
Aave has several unique selling points in comparison to its competitors in an increasingly crowded market. During the DeFi craze in the summer of 2020, AAVe was one of the bigger projects in terms of the total amount of value that was locked into its protocol.
The Aave protocol allows its users to lend and borrow 20 cryptocurrencies, giving its users a larger amount of choice. One of Aave’s flagship products are “flash loans,” which have (interestingly) been billed as the first uncollateralized loan option in the DeFi space. The catch however is that they must be paid back in the same transaction.
Another big selling point is that those who borrow through Aave ultimately have the choice to alternate between both fixed and variable interest rates. While fixed rates can provide some certainty about costs during times of volatility in the crypto markets, variable rates can come in handy if the borrower thinks that prices will fall in the near future.
Advantages of the AAVE platform
- AAVE offers a large lending pool that is available for various digital assets.
- AAVE also offers its users more features for digital lending and or borrowing.
- AAVE also offers its users stable interest rates for some of the crypto assets.
- Flash loans are one of AAVE’s largest selling points and a revolutionary DeFi feature.
Past, present and future prices of The AAVE network (AAVE)
During October of 2020, the price of AAVE reached a low point of $29.7, thereafter the price began to rise, reaching its first peak in early February of 2021 at a price of $494.6, in September of the same year, AAVE reached its second peak, coming in at a price of $516.16. Since then the price has staggered in both the upward and downward directions, the crypto has seen much volatility, which is a normal trend for the volatile nature of the crypto market. The trend that has stuck for this crypto is that AAVE’s price has been consistently declining since its September 2021 peak.
Over the past few months, the global markets have been facing strong investor risk-off sentiment in the wake of the geopolitical tensions, Covid-19 lockdowns in China and supply chain issues. The cryptocurrency market has followed the trends of the greater market during these times, therefore the price of most cryptocurrencies have been falling, AAVE does fall under this category.
According to some analysts, the future price of The AAVE network (AAVE) could reach up to $97.84 by 2024 and could see a price of more than $267.93 by 2030. However, it is important to remember that this future price prediction is based solely on data and does not take into account factors such as investor sentiment and the ever changing market conditions, both of which make it difficult to make accurate future price predictions.
AAVE Price Chart
Sources: finance.yahoo.com, currency.com, aave.com, coinmarketcap.com, cryptonewz.com
