The Internet today allows people not only to communicate and get useful information for themselves, but also to make purchases. Thanks to the mutual agreement between the buyer and the seller on the Internet, it has become possible to make transactions between users from all over the world! Let's take a closer look at what electronic money is.
Electronic money is, simply put, real rubles, dollars, euros and other currencies that have become virtual - they have been transferred to a special system for storage and circulation on the Internet.
Such systems are similar to bank transfers. The biggest difference is that for non-cash payments, an account is opened at the bank, where the user deposits his money, and then uses it to pay for services, goods or transfers. The cost of electronic currency is equal to real money. The user, having money in the account, can pay for purchases and services, and exchange them for cash. Electronic money is stored in the accounts of electronic payment systems - the so-called organizations that provide mutual settlements between participants on the Internet.
Cryptocurrencies are also considered electronic money, but the story is different with them. You hear the word "cryptocurrency" everywhere more and more often. So what exactly is cryptocurrency? Basically, it is a type of digital payment instrument that uses cryptography and blockchain technology to protect transactions from unauthorized access. The fact that a cryptocurrency uses cryptography means that an algorithm is used to confirm that the information sent with a transaction is correct, that it has not been changed, and that it is authorized by the person verifying the transaction. This may sound a little technical, but the bottom line is that it is almost impossible for a third party to influence a transaction from the outside without having access to the private keys of the owner of the cryptocurrency.
This means that if you send a transaction with cryptocurrency, no one can change, stop or influence the transaction in any way, unlike how banks can stop transactions or block bank accounts in accordance with the law. Thus, when you own a cryptocurrency, you are the real owner, and the only way for a third party to gain access to the currency is to know the owner's "password", also known as the private key.
Cryptocurrencies are decentralized, so no central authority owns and controls the currency. Instead, there are thousands of different communities that control blockchain and e-currency by constantly solving cryptographic codes.
The topic of our review is investing in Aave. Is it profitable to invest in Aave today? Read on!
Aave - what is it? A Brief History
Aave is a decentralized financial protocol that allows users to borrow cryptocurrency. Aave means "ghost" in Finnish. Aave's predecessor, ETHLend, founded Stani Kulchov in 2017. It was practically the first lending protocol, long before decentralized finance existed. The platform had some popularity and decided to infiltrate the DeFi space. The team launched the Aave protocol and added new features that changed the DeFi industry forever.
According to Stani Kulchov, Aave's main target market is users who are already involved in the cryptocurrency community.
Why is Aave unusual? Aave has unusual advantages: during the DeFi frenzy in summer 2020, it was one of the biggest projects in terms of the total value of the cryptocurrency captured in its protocol. The project allows users to borrow funds in 20 cryptocurrencies, which means that users have more choice.
The Aave protocol was officially launched on January 9th. He drew attention to the ineffectiveness of comparative analysis between debtors and creditors and introduced the DLP decentralized credit fund. Investors invest cryptocurrency in a decentralized loan fund and receive interest on the deposit. The borrower locks the cryptocurrency, borrows assets from the loan fund, pays interest and repays the loan during the lockdown. The Aave Agreement enables both debtors and creditors to meet the needs of both debtors and creditors in a timely manner, thereby improving product utilization.
One of Aave's flagship products is Quick Loans, the first unsecured loan option in the DeFi zone. This allows users to borrow large amounts of cryptocurrency without providing security. The only limitation is that they must be returned to the next Ethereum block. The immediate loan fee is 0.3%.
Another important argument is the ability for borrowers to alternate between fixed and floating interest rates. While fixed interest rates can provide cost safety during periods of volatility in cryptocurrency markets, variable interest rates can be useful if the borrower believes prices will fall in the near future.
- Aave tokens allow lenders to earn interest. For placing funds in Aave, the user receives an equivalent amount in platform tokens.
- Every second, a small fraction of the corresponding tokens are added to the Ethereum wallet according to the annual percentage rate for the selected asset. Tokens can be exchanged for the equivalent amount of the underlying asset in Aave at the time of withdrawal.
- Token circulation is related to the total value of funds locked in Aave, because tokens are burned whenever the protocol collects a fee.
- AAVE tokens are based on the ERC-20 standard and are intended for deflationary use.
The initial coin offering took place in November 2017 when Aave was operating under the ETHlend name. During the ICO (initial token offering), it was possible to raise $ 16.2 million by selling one billion LEND tokens at a rate equivalent to $ 0.0162. At that time, 23% of AAVE tokens were transferred to its founders and the project.
The token is used to pay for the protocols while it is being burned. This means that the LEND token is a deflationary asset. The LEND token is also used to control, vote, and propose changes to the protocol.
Is Aave a good investment?
Choosing the right cryptocurrency is not an easy question. We, in turn, can offer guidance on the following main criteria for choosing a cryptoasset for investment:
- The popularity of Aave in the blockchain community. The trading ticker Aave can be found on most major exchanges and news related to it is published by reputable publications, which means that this is one of the most promising cryptocurrencies. Aave is easy to sell and once invested, you most likely won't lose any money.
- Liquidity: the higher the liquidity of Aave, the easier it is to sell (buy or sell) the asset.
- Exchange Representation: The addition of Aave to the listings of major exchanges also speaks of its relevance and interest from investors.
- Trading volume: a direct indicator of the success / failure of a crypto project.
- Current market rate: how much is Aave worth at a given time.
- Exchange rate against fiat money: conversion and withdrawal in fiat currencies.
- Perspective: how interesting and promising Aave is, its uniqueness and vitality.
- Security. From the foregoing, the conclusion suggests itself that a promising currency should be well protected. The best cryptocurrencies need to have a fairly strong network to minimize the chances of an attack.
Should traders invest in Aave and what are its benefits?
Today, the main reason people invest in cryptocurrencies is to make money, and as quickly as possible. Investing in Aave is the right decision because:
- Aave is available to every user.
- Investing in Aave is transparent and every element is added to the decentralized blockchain.
- Aave cryptocurrency, unlike fiat currencies, is very easy to use.
- Aave is highly liquid, which means you can quickly convert it to fiat currency.
- The cryptocurrency market never sleeps. Aave's decentralized cryptocurrency isn't limited to banking hours.
Where can you buy Aave and how can you invest in Aave?
There are many ways to buy Aave. Typically, the first thing you need to do is register with a broker or stock exchange. These platforms act as intermediaries helping you buy, sell and exchange coins.
To find the best prices and exchange coins on a peer-to-peer network with other users, it is worth choosing cryptocurrency exchanges. These services act as an open marketplace where you can buy and sell to other people in real time, and often offer a wide variety of cryptocurrencies.
Several of the largest exchanges support AAVE token trading, including CoinDCX, Binance, CoinBene, and OKEx.
To quickly and easily buy cryptocurrency or trade in markets with technologies such as CFD trading, an advanced investment platform would be your best option. These platforms are designed to make the buying and selling process as easy as possible, and many of them also have integrated applications. This is the fastest and easiest way to trade Aave. You don't need to create a wallet and then go to a cryptocurrency exchange. All you need is to open an account. A big plus is leverage. Brokers offer leverage for those who buy CFDs. Leverage is nothing more than a loan that investment platforms offer, which means you have the ability to access Aave more easily than if you bought it directly. Make money off the price difference. CFDs are speculations on changes in cryptocurrency prices.
The price of almost all well-known cryptocurrencies is skyrocketing this year, and cryptocurrency trading is more popular than ever. A trader who decides to invest in Aave must set specific goals for himself, having achieved which he can get a great profit. By choosing a modern trading platform, all your actions will be entrusted to the broker to complete transactions on your behalf and at your expense. You can always consult and get help. Everything is easy and simple! Take action! We wish you easy and profitable deals!