What is Aave?
Aave is a decentralised, non-custodial Ethereum-based liquidity protocol for cryptocurrency owners. In this Aave review, we take a closer look at the history, features and tokens of this protocol.
Aave was originally called ETHLend and was a designated ether-lending protocol. In 2018, it rebranded and expanded its service offering and evolved into one of the largest money markets in the industry.
With Aave, crypto lenders are connected directly to borrowers using smart contract “match-making” mechanisms, and there is no need for an intermediary or credit checks, and lenders can lock their funds in liquidity pools and earn interest on borrowed assets.
Aave is an excellent choice for crypto owners who are interested in borrowing or lending their digital assets, or if they seek high-yield savings accounts for cryptocurrencies and stablecoins.
Who created Aave?
Aave was founded by Stani Kulechov, who originally launched ETHLend in 2017, which was one of the first DeFi dApps ever created. Academically, he studied Law, but he has shifted his focus to creating open-source Ethereum-based tools that are compatible with the Aave ecosystem.
What are the Features of Aave?
Aave allows its token holders to govern the network and ecosystem through a DAO (decentralised autonomous organisation) and as a non-custodial liquidity protocol, deposits of digital assets will always be controlled by the token holders and will never be stored directly with Aave.
Unique to Aave, borrowers on the network can make use of Flash Loans for a small fee, which allows you to borrow any amount of assets without collateral, as long as the liquidity is returned to the protocol within one block transaction.
Aave protects its lenders by encouraging them to pool their assets into a safety module, which is a special type of liquidity pool that was designed to pay back lenders by selling assets in the pool, in case there is a shortage of capital.
This extra layer of security ensures that lenders do not put their assets at risk.
This is not only an innovative platform for lending and borrowing digital assets, but it can also be used for the development of third party Ethereum-based applications and Aava has already secured several partnerships, including Axie Infinity, Pixelcraft Studios and Balancer.
What is the AAVE coin?
The Aave ecosystem has two native coins which each play different roles within the framework of its network.
The first token is the AAVE token which is a governance token that can also be staked in return for rewards and pays for transaction fees, and there are only 16 million of these tokens available.
The second token is the aToken, which is an interest-bearing token that is native to Aave, and it is pegged in a 1:1 ratio to the token that is being deposited by lenders.
This is an interchangeable token that is obtained as a reward for interest earned on deposits, and it can be exchanged for the original coin type or for another coin.
How to buy AAVE
Unless you are able to mine AAVE, the only other way to obtain these coins is by buying them from an exchange.
Most popular exchanges, such as eToro, Coinbase and SoFi, will sell AAVE coins.
Follow these steps to buy AAVE:
Step 1: Create an account with your preferred exchange
Step 2: Follow the online application process and verify your account
Step 3: Log in to the client portal and fund your account
Step 4: Go to the exchange or P2P page (if P2P is available)
Step 5: Search for the token using the search bar and confirm the transaction
What are the best AAVE wallets?
The safest form of storage is a trusted crypto wallet with good ratings, to avoid the theft of assets, the loss of access keys, and so that you know you truly own the coins and tokens you purchase.
Based on research, we recommend using these wallets:
- Trust Wallet
- Mew
- Status
Trust Wallet is free to download and use, and supports a total of more than 160,000 coins and digital assets. This wallet can be used to buy, sell and trade your assets, and also allows you to manage your coins directly from the wallet.
Trust Wallet improved security measures and uses private access keys, biometrics and unique pin codes to protect your account.
Mew, or MyEtherWallet, is an original Ethereum wallet that is free to use, open source and compatible with smart contracts. This wallet can be used to send and manage ERC20 tokens and NFTs, and it also offers a built-in cross-chain swap and a dApp browser.
What makes this wallet unique is that custom ethereum-based tokens can easily be added if you can’t find the tokens you are looking for and it can be used with 8 different hardware wallets.
Status is an open-source, 3-in-1 crypto application that can be used for peer-to-peer communications, managing cryptocurrencies and browsing web3 applications.
This wallet can be used to send, store and receive ERC20 and ERC721 tokens and it offers a built-in dApp browser that can be used to access a variety of games, marketplaces, exchanges and social networks. Accounts can be generated anonymously and no personal details will ever be stored on this wallet.
Conclusion
What we like most about Aave is the way it has not only created alternative income streams for crypto holders, but how borrowing digital assets has been made so much easier for individuals and businesses who were not able to access cryptocurrencies previously.
Aave offers a secure, user-friendly environment for entrepreneurs, enterprises and casual crypto owners to lend and borrow assets without interference from third-parties and without giving up ownership of their asset, and also allows developers to get creative on the platform.
We hope that this Aave review answers some of your questions about this protocol.
Good luck with your trading!
FAQ
What is Aave?
Aave is a decentralised, non-custodial Ethereum-based liquidity protocol for cryptocurrency owners.
Who is the founder of Aave?
Aave was founded by Stani Kulechov
What token does Aave use?
The Aave ecosystem has two native coins which each play different roles within the framework of its network.
The first token is the AAVE token which is a governance token that can also be staked in return for rewards and pays for transaction fees, and there are only 16 million of these tokens available.
The second token is the aToken, which is an interest-bearing token that is native to Aave, and it is pegged in a 1:1 ratio to the token that is being deposited by lenders. This is an interchangeable token that is obtained as a reward for interest earned on deposits, and it can be exchanged for the original coin type or for another coin.
How to buy the AAVE token?
Unless you are able to mine AAVE, the only other way to obtain these coins is by buying them from an exchange.
Most popular exchanges, such as eToro, Coinbase and SoFi, will sell AAVE coins.
What wallets can I use on Aave?
Based on research, we have compiled a list of the top 3 wallets that are compatible with the Aave ecosystem and suitable for storing AAVE coins.
Trust Wallet is free to download and use, and supports a total of more than 160,000 coins and digital assets. This wallet can be used to buy, sell and trade your assets, and also allows you to manage your coins directly from the wallet. Trust Wallet improved security measures and uses private access keys, biometrics and unique pin codes to protect your account.
Mew, or MyEtherWallet, is an original Ethereum wallet that is free to use, open source and compatible with smart contracts. This wallet can be used to send and manage ERC20 tokens and NFTs, and it also offers a built-in cross-chain swap and a dApp browser.
What makes this wallet unique is that custom ethereum-based tokens can easily be added if you can’t find the tokens you are looking for and it can be used with 8 different hardware wallets.
Status is an open-source, 3-in-1 crypto application that can be used for peer-to-peer communications, managing cryptocurrencies and browsing web3 applications.
