- Best DeFi protocol that allows users to lend/borrow at easy terms and flexible return interest rates.
- AAVE serves as a governance token and allows users to have a share in shaping the future of the protocol.
- Holders of AAVE token are entitled to discounted fees.
- A large amount of tokens are in the hands of a few investors taking away the decentralised part of the project. Critics have pointed out that AAVe has been unable to solve the issues currently plaguing the retail lending market.
AAVE is a popular decentralised finance (DeFi) protocol that allows users to lend or borrow cryptocurrency assets. The protocol has become popular for its new features such as flash loans and the ability to offer fixed and varied rates of interest.
AAVE is a flexible product and has taken the DeFi world by storm. The AAVE token generates a passive income by accruing interest and also allows users to get access to loans at reduced rates and less fees.
The initial total supply of AAVE was 1 billion tokens and 23% was given to the team. The project functions as a fully decentralised ecosystem. A token swap was later carried out reducing supply to 16 million AAVE. The distribution mechanism is explained below:
Reserved for LEND token holders swap: 13 million
AAVE Ecosystem Reserve: 3 million
Has AAVE Token been audited and doxxed?
Yes. The AAVE token has been audited by multiple authorities including PeckShield, SigmaPrime, Consensys Diligence, MixBytes, CerTiK, Certora, Open Zepellin, and Trail of Bits. The team behind the AAVE Token publishes regular documentation via press releases and is active on social media channels.
Trust & Fairness: 5
Exchanges & Swaps: 5
Overall Rating: 4.75
Detailed Review of Aave (AAVE)
The AAVE token is used inside the Aave ecosystem that allows users to lend or borrow loans at easy repayment terms. AAVE is one of the most popular decentralised finance projects currently and has outshined other similar protocols in terms of total value locked (TVL). It was initially called ETHLend but later rebranded after a swap to the current AAVE tokens. The swap was carried out in the ratio of 1:100.
AAVE workes on the Ethereum network where lenders can stake tokens in liquidity pools to earn a share of the fees. Borrowers withdraw liquidity and take loans. AAVE currently offers deposits in 31 cryptocurrencies and more are being added.
The AAVE network is known for introducing the innovative Flash Loan concept where users can take quick loans without the need for a collateral amount. The interest is provided in the form of aTokens that can be freely traded or can be encashed easily.
The AAVE token is used for staking purposes to secure the protocol and is also used for voting purposes. Hence, the AAVE token serves twin purposes: governance and staking.
There is no minimum or maximum amount limit for deposits on the AAVE network. Users have preferred AAVE because of its attractive feature of offering both fixed and variable interest rates. Users can opt for either option depending on their preference. AAVE also allows switching between the two rates at any time (even after the loan has been issued).
Where and How to Buy Aave Token?
The Aave token can be bought on almost all popular exchanges such as OKEx, Binance, Digifinex, Coinbase, Nominex, WazirX, Gate.io, FTX, Huobi Global, KuCoin, Bithumb, Kraken, Crypto.com, Gemini, Bitfinex, Coinone, Poloniex, Phemex, LBank, Upbit, Paribu, CoinDCX, LATOKEN, and BitForex, Bybit, Bittrex, Balancer, Upbit, BitWell, XT.COM, Bitexen, WooNetwork and Bitvavo.
You can buy AAVE either through cash via P2P (peer to peer), credit or debit cards or through other cryptocurrencies.
If you already hold some crypto, then you can use the coins to purchase AAVE directly through supported decentralised exchanges such as Uniswap. All you need to do is connect your wallet such as Metamask and select the appropriate coin pair that you wish to use for purchasing AAVE (for example: ETH/AAVE). The decentralised exchanges are a quicker and easier method that guarantees anonymity as you do not have to deposit fiat currencies or complete a KYC process before purchasing the Aave token. You can also use AAVE for purchasing other altcoins through the decentralised route as explained above.
What Can you do With the Aave Token?
Use AAVE for discounts: The AAVE holders are not charged fees while borrowing and get discounts on fees while using AAVE as a collateral option. Using AAVE as collateral also entitles borrowers to a higher limit.
Hodl as a long term investor: You could also simply hodl it and gain from its price appreciation in the long term. The token also generates passive income for its holders as it can be staked. Rewards in AAVE from staking can be issued in the form of direct rewards or BAL tokens and trading fees from ETH/AAVE Balancer pool tokens.
Swap AAVE to other tokens: You can use AAVE and directly swap to other altcoins on a decentralised exchange. The process is quick and simple, and is described below.
How to Swap AAVE to other altcoins
Simply head over to a decentralised exchange and connect your wallet. Then, select the amount of AAVE you wish to spend (factoring in transaction fees) and swap for another crypto token. You will receive the tokens in the same wallet.
How to Buy AAVE?
In order to buy AAVE, you will need to use a centralised exchange or a decentralised exchange. Decentralised exchanges (DEXs) are simple and easy to use and do not require any registration. The process of token swap on DEXs has been explained above.
For purchasing AAVE on a centralised exchange, you will need to register and create an account with the exchange and then deposit fiat currencies or crypto assets that can be used to buy AAVE. You will need to complete the Know Your Customer (KYC) procedure to open an account on a centralised exchange.
Steps to open an account on a centralised exchange:
1. Go to the exchange site where AAVE is listed and click on the Register button.
2. Then select your country of residence and proceed to the registration interface. Here, you will need to provide your email ID/phone number and a password that will be used to login into the newly created account. You should select an exchange that offers AAVE as a product in your country of residence.
3. Click on the agree to terms and conditions button and wait for the verification mail or message.
4. Clicking on the verification tab will take you to your new account. You will need to provide documentation such as a driving license, passport or other government-issued IDs to confirm your identity and address. A utility bill and national ID may also be accepted in some cases. This process is known as the KYC regulation and it is in place to prevent the risk of fraud and to ensure that the site is safe for all users. This is the last step before you proceed to purchase AAVE.
5. Once this additional step is completed, the exchange will activate your account and you can deposit funds to start trading. You can select fiat currencies or cryptocurrencies supported by the exchange to deposit funds to buy AAVE.
6. Most exchanges support multiple payment methods including credit/debit cards, bank transfers, third party payment processors and P2P transfers for buying AAVE.
Upcoming Events/Future Roadmap
AAVE recently announced Boosted Pools in collaboration with Balancer that will boost liquidity for users to enjoy higher yields.
The all-time high price of one AAVE was $661.69 on May 18, 2021. It is currently trading at $176.11 at the time of writing (Source: CoinGecko). The all-time low price was $26.02 on November 5, 2020. Comparing the all-time low and all-time high price, we get returns of about 578% which are very impressive returns. The AAVE token is slowly establishing its position as a leading cryptocurrency.