Aave is a decentralized finance protocol that allows people to lend and borrow crypto. Aave provides holders with discounted fees on the platform, and it also serves as a governance token giving owners a say in the future development of the protocol.
Who are the founders of Aave?
Aave, and its predecessor ETHLend, were founded by Stani Kulechov. At the time, he was frustrated at the lack of lending applications on Ethereum — and his project was built before decentralized finance even existed.
Kulechov is a serial entrepreneur who went to law school and began programming when he was a teenager. He was an early adopter in the blockchain space. The CEO has said that he wanted to rebrand ETHLend as Aave so the company could offer a wider range of services beyond Ether lending.
Purpose of Aave
The project allows people to borrow and lend in about 20 cryptocurrencies, meaning that users have a greater amount of choice. One of Aave’s flagship products are “flash loans,” which have been billed as the first uncollateralized loan option in the DeFi space. There’s a catch: they must be paid back within the same transaction.
Another big selling point is how those who borrow through Aave can alternate between 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.
Key Metrics
| Ticker | AAVE |
| Token Name | Aave |
| Token Type/Protocol | ERC-20 |
| Total Token Supply | 16,000,000 AAVE |
| Current Circulating Supply | See Coinmarketcap |
| Market Capitalisation | See Coinmarketcap |
| Token Creation Date | November 2017 |
| Can it be mined? | Yes |
Insights
- Aave adds the ability for users to take out borrowed positions on fee-collecting tokens like Uniswap LP tokens and TokenSets. Users could take out a loan against a position that is earning them revenue – without having to sacrifice the opportunity cost of being unable to enter those positions in order to take advantage of crypto lending and borrowing.
- Flash loans can be a powerful tool with multiple functions, but at the same time, a high-level threat to these protocols.
- Aave Protocol has integrated with Chainlink to power the Aave oracle network. By leveraging Chainlink oracles, Aave Protocol’s prices reflect real-time conditions on and off chain.
Official Website: https://aave.com/
Whitepaper:
https://github.com/aave/aave-protocol/blob/master/docs/Aave_Protocol_Whitepaper_v1_0.pdf
Note
Cryptocurrency and digital tokens are high risk. You may lose the entire investment amount. Please study and invest appropriately with your acceptable risk level.