Aave (AAVE)

What is AAVE?

AVAVE, a protocol based on Ethereum. It is, of course, characterized by systemic decentralization, which is an indispensable element. Thanks to AAVE, it is possible to make "loans", as well as the possibility of additional earnings on the virtual currency.

As already mentioned, cryptocurrency borrowing and here the operation of AAVE should be explained, the basis of which is the deposit by entities of virtual currency from the lending pools. This all leads to earning nothing but interest.

Fun fact : The AAVE project appeared in 2017 and was called ETHLend. The functionality was based on the ICO, which received funding of approximately $ 600,000. 

How does AAVE ensure the privacy of its users?

AAVE allows lenders liquidity by depositing cryptocurrencies in a pool of smart contracts and thus it is possible to borrow from the same savings agreement. The previously collected funds provide certainty of the functioning of the system and the borrowed amounts, and are a guarantee of security. 

AAVE protocol

It should be indicated that the AAVE protocol controls LEND tokens. First, the protocols are triggered by decentralized management in connection with the DAOStack-based chain, and all this turns into an independent protocol. The specificity of the operation is a binding vote, where there is a necessity to execute due to the constant coding.

In connection with the above-mentioned operation, the protocol has the possibility to change and create a loan section, where it is possible to create your own "pool". Moreover, the management of AAVE will take place in 2 stages: 

1. By voting on protocol management, through which decisions on protocol parameters will be made along with the updating of smart contracts, these activities are compared to the way MakerDAO is managed, where voting takes place.

2. A pool management step takes place, where votes are counted according to the pool's liquidity share. They are related to parameters such as an asset used in savings or loans. In this scheme, the pool will have its own protocol management capability.

The loans are based on the Lending Pool Core contract, which includes several elements, including has a reserve of deposited assets. The contract makes calculations and transfers the data to the Loan Pool. How does the contract work in detail? First of all, it calculates the user's Ether equivalents, including loan balances, collaterals and liquidity in order to assess how much the entity is able to borrow. 

The LendingPoll contract works through both the Lending Pool Core and the Lending Pool Data Provider, which create an interaction through several actions that can be defined in seven steps:

1. Deposit

2. Use 

3. Loans

4. Pay off 

5. Exchange rate

6. Liquidation 

7. Instant loan

LendingPool - how does it work?

The first essential function is the implementation of loan tokenization. At the time of payment of cash to the reserve, the entity will receive the appropriate value of tokens that will map the liquidity and accrued interest of the underlying asset. The value of tokens increases when they are not liquidated, and whenever an entity wants to take advantage of a loan, files are used for security - they are blocked and cannot be transported.

How do I earn money with AAVE?

Thanks to the AAVE platform, it is possible to take a loan in the Ether (ETH) or AAVE cryptocurrency. It is worth pointing out that specific conditions have been defined that will entitle us to take advantage of the loan option. In order to earn, however, we focus on interest, which is to constitute a potential salary, for this purpose it is necessary to acquire portfolios.

Advantages and disadvantages of the AAVE cryptocurrency

Due to the fact that the loans with credit protocols received an EMI (Electronic Money Institution) license from the FCA (United Kingdom Financial Conduct Authority), the market increased on August 27, 2020 by up to 30%! Therefore, the main advantage is its truthfulness and confirmation by such important institutions, which for some users may be a confirmation of its truthfulness. What's more, AAVE also seems to be able to add extended functionality at any time, when the entities issued the majority of opposing votes.

One of the disadvantages, however, is that it depends on users who actually hollow out its future by making certain changes in the system. 

AAVE and Bitcoin - basic differences

How much does AAVE cost? On which exchanges is it listed?

The AAVE rate on November 1 is approximately PLN 116 with a 24-hour trading volume of PLN 274,163,562. According to the analysis, the maximum amount of cryptocurrencies is 16,000,000, of which over 11,000,000 are in circulation. As will be indicated below, the possibility. The purchase of cryptocurrency is possible, among others by Binance, where it can certainly be considered one of the most active markets to trade with AAVE.

Cryptocurrency wallets for AAVE - which one to choose?

AAVE seems to be a forward-looking project, and its implementation and sharing on an increasing number of cryptocurrency exchanges confirms it. Confidence in AAVE and awareness of the cryptocurrency is increasing, so further expansion of its call options is anticipated. Below we present the wallets that will be suitable for the virtual currency in question.

Examples of cryptocurrency wallets for AAVE