Aave - one of DeFi's biggest hits

Loans and deposits in cryptocurrencies, but above all, arbitration and earning on differences in the exchange rates of tokens on individual cryptocurrency exchanges. The Aave platform and cryptocurrency is a project that turned into a giant from a small DeFi project.

We continue the cycle of the Forex Club portal, in which we analyze and describe the largest, highest-valued, most interesting, most developmental, advanced and also the most controversial cryptocurrency projects around the world. Today it's time for Aave, a platform and cryptocurrency whose capitalization is increasing at a dizzying pace.

How Aave Works

Aave is a decentralized platform based on the Ethereum blockchain. You can make money on it by depositing cryptocurrencies in interest-bearing accounts. And although there are similar projects in the world blockchain quite a lot, but this one is gaining more and more enthusiasts. Why? Undoubtedly, an important element is the possibility of choosing a fixed and variable interest rate. The key, however, are the so-called quick loans that allow you to raise up to millions of dollars. This is what makes Aave quickly ahead of the competition. 

The main function of attracting to Aave are the so-called Flash loans. It is a literally instant loan, because cryptocurrencies are transferred immediately. We also do not have to fill out complicated bank forms, prove the amount of earnings or our credit history. Everyone will get a loan, regardless of the purpose for which they want to use it. Where's the catch? In security via blockchain. It must be secured immediately by paying off the same blockchain transaction Ethereum. That is why, de facto, these are not most often loans, but arbitrage transactions, thanks to which you can earn on exchange rate differences - both between cryptocurrencies on cross pairs and between individual cryptocurrency exchanges. 

You choose the loan interest rate yourself

An interesting option at Aave is also the choice of the form of interest. Everyone decides for himself whether the interest rate should be fixed or variable. Therefore, you can significantly increase or reduce your costs, depending on the accuracy of your decisions. What's more, the interest rate on the loan can be changed even during its duration. This is crucial especially during large price movements in the cryptocurrency market. Initially, the floating interest rate is lower, but in the event that another price rally begins, which is not unusual in the crypto market, it is worth switching to a fixed interest rate, because interest increases by leaps and bounds.

In this way, you can invest practically without your own contribution in many of the most important tokens, including: LINK, BAT, ETH, DAI, TUSD, USDC, WBTC or KNC.

Beginnings on Ethereum

The project started at the beginning in close connection with the Ethereum network. Even the name referred to it, because in 2017 it was ETHLend. ICO was not - as for the cryptocurrency market - phenomenal, because it acquired "only" 600 thousand from investors. USD, which made it possible to launch the DeFi (decentralized finance) project. 

After three years, the token has already become independent and changed its name from Lend to Aave. There was also a denomination, because there are 100 times less new tokens than ancestors. However, the token is still based on Ethereum in the ERC-20 standard. It will also be regularly "burned" - such as Binance Coin (BNB), which makes it deflationary by definition and should increase in value. 

Aave Quotes

As of January 20, 2021, Aave can be traded on 22 cryptocurrency exchanges around the world. There are 373,3 thousand in circulation. of the planned 1 units. You have to pay $ 297 for each, which translates into a capitalization of more than $ 624 million, which is undoubtedly impressive when we look at that four years ago it was 033. USD.