469
views

Borrow and Lend Digital Assets on the Aave Platform – An Open-Source DeFi Protocol

The crypto space has grown tremendously over the years, but not much progress has been made regarding lending and borrowing digital assets. However, many companies are taking a step in this direction, and Aave is a perfect example. 

Aave is an open-source DeFi protocol that allows users to borrow and lend digital assets. The platform comes with the traditional loan features and includes several unique features that make it stand out. 

In this article, we will review the platform and understand its features and how it works. 

What is Aave?

Aave gets its name from the Finnish language and loosely translates to ‘ghost.’ The platform aims to provide a transparent and open infrastructure for decentralized finance. The platform was founded in 2018 as the parent company to ETHLend. 

Although ETHLend is a Swiss-based company, Aave has its headquarters in London. The company’s top executives moved from ETHLend after it became a subsidiary of Aave. The DeFi platform has a multicultural team of innovators, which is made of 18 creatives. Aave’s CEO is Stani Kulechove, and Jordan Lazaro is the COO. 

Currently, Aave’s market size is $44,635,809.23 and has 17 digital assets listed on the website. 

Aave works by allowing users to participate as either a depositor or a borrower. Depositors get to earn a passive income by providing liquidity to the market. Borrowers, on the other hand, can get a loan either perpetually or in as one-block liquidity. 

Aave’s protocol is a set of smart contracts on the Ethereum blockchain. These contracts eliminate the need for intermediaries and, therefore, offer more security. Besides, several auditors develop the security protocol for Aave. Through the platform, users get to interact with smart contracts and blockchain data. 

Why Should You Choose Aave?

There are several platforms at the moment that allow you to borrow and lend cryptocurrencies. So, why should you pick Aave out of all these? Here are some of the products and services you will benefit from by trading on the Aave platform. 

  • aTokens

Like many of these platforms, Aave has come up with its tokens. The aTokens are Aave interest-bearing tokens. These tokens are minted upon deposit and burned upon redemption. Users have to deposit their digital assets in the Aave protocol and then act as the underlying assets. The aTokens are then pegged to the underlying assets 1:1 for their value. 

Borrowers get to loan the underlying assets. The aTokens pegged to these assets then accrue interest in real-time directly to the wallet. The best part is that you get to watch your balance grow, and you can have the interest redirected to an Ethereum public address whenever you want. 

Because the aTokens are pegged to underlying assets, you earn interest in stablecoins such as aDai and aUSDT.

  • Flash Loans

Although several platforms offer loans for digital assets, this product from Aave is quite innovative. These flash loans are the first option in decentralized finance that offer uncollateralized loans. As long as the liquidity is returned to the pool within one transaction block, there is no need for collateral.

Thanks to the zero collateral, there is the safety of the funds in the reserve pool. If the liquidity cannot get back to the pool, the block reverses the entire transaction to undo the entire actions up until that time. 

Flash loans are useful for everyone, seeing as they don’t require any capital to get started. Therefore, the entry barrier is quite low, making it quite affordable for anyone. 

  • Referral Program

Aave’s referral program is quite lucrative. To be a part of the program, you will need to fill the referral form and get a referral code after 1-2 business days. Users must input the code for either deposit or redeem calls. The program offers a 20% fee-share. 

Whenever a borrower takes out an Aave loan, they are charged a 0.25% origination fee. Aave developers use 80% of this fee to buy the token LEND on the market and reduce the monetary supply by burning the Lend. Referees then receive the remaining 20%

  • Aave Pay

Users who reside in Europe have access to Aave Pay. Through this service, they can use their crypto balance to pay for their items using fiat currencies. The service allows users to take out ETHLend and send fiat to any bank account without cashing out their crypto holdings. 

How Does Aave Work?

As we have mentioned above, Aave is quite an easy platform to use. To get started, you must first head over to the Aave website. The site supports three web 3.0 wallets that users must connect to first before using Aave. These three wallets are Metamask, Fortmatic, and Coinbase Wallet. 

Users can then start earning interest immediately by supplying funds to the protocol. Doing so also increases the chances of borrowing more digital assets. 

The Aave interface is quite straightforward. If you wish to deposit some assets, you only need to search for it and select the amount you want. Aave will then ask you to approve access to the asset, after which you will need to sign the transaction. 

Your assets immediately get into the lending pool, and you can monitor your accrued interest. In exchange for your digital assets, the platform will aTokens. These tokens represent your claim to the lending pool and have an equivalent value to the underlying assets. The tokens earn either stable or variable rates, and users can switch between the two, however much they like. 

Final Word

Bitcoin live price
Btc
Bitcoin
$30.110
price
2.73066%
price change
BUY NOW

The Aave platform is definitely an innovative product in the crypto space. Through the platform, you get to borrow and lend digital assets and watch your balance grow in real-time. Besides all the benefits we have already mentioned, you can also participate in the bug bounty campaign that lets you earn rewards whenever you find bugs and vulnerabilities on the platform. 

Stay up to date with our latest articles

More posts

RodeoCoin – Supporting the Western Lifestyle through Crypto

RodeoCoin is a hyper-deflationary token running on Binance Smart Chain seeking to reward its active users with BUSD reflection rewards. The project’s ultimate goal is to build a Community Wallet supporting the western lifestyle and community-oriented initiatives, including promoting talents in art, sports, and music. This short RodeoCoin review looks closely at one of the most recent projects to surface in the market. Read on to discover its features, tokenomics, and roadmap! What is RodeoCoin? RodeoCoin evolved from a group…

Shazu – Channeling the Ninja Abilities within NFT Collectors and Crypto Enthusiasts

Shazu is a community-driven project featuring a deflationary token, SHAZU, and a collection of unique Ninja NFTs. Its goal is to help users increase their financial freedom through reflection rewards, staking opportunities, and digital collectibles. This short Shazu review looks closely at one of the latest projects to surface in the cryptosphere. What is Shazu? Shazu is a project seeking to grow through its community while rewarding its members at the same time. It features a deflationary token on the…

WinWinCoins Will Make Crypto Trading More Accessible for Everyone

WinWinCoins is an innovative blockchain project providing a next-gen AI robot trading solution to help investors increase their profits. Its goal is to build an advanced, democratic platform easily accessible to everyone. This way, even newbie traders with little market knowledge can have a positive experience in cryptocurrencies. The WinWinCoins team believes it can accelerate crypto adoption by providing legitimate trading tools available to everyone. To this end, its trading bot could help eliminate losses and increase access to profitable…

SafeSwap Deploys on the Polygon Network to Allow the Farming and Staking of SSGTX

SafeSwap, a decentralized crypto exchange platform, has recently deployed on Polygon, previously known as the Matic Network, a scaling solution for public blockchain networks.   The integration of the Polygon chain by SafeSwap aims to revolutionize the DeFi industry by allowing the farming and staking of SafeSwap's token, SSGTX. The partnership enables users to exchange information without losing ownership or control in the staking and trading industry.  The main objective of SafeSwap is to empower traders and liquidity providers with an easy-to-access financial…

API Inu – A Blockchain Service Suite Joining the Meme Coin Hype

The meme coin hype is leading to the creation of more creative projects revolving around this type of cryptocurrency. In this context, API Inu is one of the latest examples, with a combination of blockchain data services and a meme token. Using TradingView's professional charting libraries, the project wants to provide simple indicators for beginner traders. Furthermore, the team wants its community to enjoy access to essential data like liquidity, trading volume, risk exposure, and fear vs. greed indicators.  API…

Ragdoll Cat NFT – A New Decentralized Project to Help Cats in Need

As the blockchain market grows, we learn more and more about how this technology can influence our daily lives. Ragdoll Cat NFT is a new project that puts together the interest for crypto, decentralized communities, and cats. In the following sections, we wish to report, in a neutral way, all the main features of this new initiative. After describing the ecosystem designed by the team, we’ll include some of the future developments that we should expect from the project. About…

Tiny Colony Review – The First-Ever Expansive Pixelated Tinyverse

Tiny Colony is a pixelated ecosystem of games, events, and experiences built on Solana that allows users to play without requiring NFTs. It features the first-ever construction and management blockchain game and benefits from the backing of iLogos, the prominent developers of Angry Birds 2, and regular partners of Disney, Ubisoft, EA, Rovio, and DreamWorks. The project is currently in full swing after striking partnerships with Fractal Marketplace, Twitch creator Justin Kan, and popular YouTuber iJustine. Furthermore, the game raised…

Rocket Global – A Next-Gen Hybrid Crypto Exchange

The market of crypto exchanges is crowded, and new initiatives in this niche always need to develop something innovative to have a chance of survival. The sector is still far from reaching a mature phase, and creative teams have an opportunity to improve the current inefficiencies of the market. Today we will talk about Rocket Global and impartially review its main features. Our short overview wishes to highlight the key characteristics of the project to let the readers form an…

C4G3 – A Project Featuring the First Decentralized Meme Index

Meme tokens have had immense success after launching on the market as a joke with Dogecoin ($DOGE). This niche gradually became a serious business as the coins’ market cap grew exponentially. The C4G3 Meme Index is the world's first digital asset index designed to track the performance of meme tokens within the cryptocurrency industry. Our review will look closely into this new project and provide the readers with the main details shared by the founding team. About C4G3 Creating an…

Stoner Doge – A Cannabis-Related Blockchain Project Oriented to Charity

It is not uncommon for blockchain developers to create a project to provide charities and non-profit organizations with funding. Stoner Doge is one of the latest examples in this market niche, with its intention to launch a cannabis-friendly project connected to charitable groups in the sector. Today’s review will introduce the project and its main features to the readers, and it will do so in a neutral way. Eventually, it will only be up to single investors to discover this…