Aave (Lend): overview of the token and platform, rate chart, advantages and disadvantages, development prospects

Aave is a lending platform originally known as ETHLend, but with a radically revamped strategy. While ETHLend enabled direct lending relationships between lenders and borrowers, a decentralized pool-based strategy began with the release of the Aave protocol. We offer an overview of this platform from the editors of Profinvestment.com.

The lending pool works like this: Users create liquidity by depositing cryptocurrencies into the pool. Other users can use these funds, leaving others as collateral. Loans are not selected individually - the same conditions exist for everyone, which are adjusted depending on the current state of the pool. All operations are managed by smart contracts.

The interest rate is determined algorithmically for both borrowers and lenders. It depends on the ratio and value of the funds currently available in the pool.

LEND is a token created to control the protocol. Its owners can participate in voting for certain changes in the project. All voices are hard coded, and the actions that follow them are invariably executed.

You can trade the LEND token on the Binance cryptocurrency exchange. The pairs presented are: LEND/BTC, LEND/BNB, LEND/USDT, LEND/BUSD, LEND/ETH.

#Binance Lists December Community Coin - #ETHLend (LEND)@ethlend1 https://t.co/mXVFgg9yOD

— Binance (@binance) December 12, 2017

general information

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conclusions

Aave was the subject of our discussion. Thanks to its potential and relevance, all investments in it will pay off. A really good investment if you want to hold the coin for a long time. To be clear, these forecasts are usually not the most important factor when choosing a purchase.

According to experts, their conclusions are influenced by technical analysis and external variables. It's also good to gather your ideas and then use predictions to form your point of view. Finally, it's good that you don't rely on price forecasts.

Let us know if there is anything left untouched related to Aave price forecast.
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What features does Aave offer?

Flash Loans

Flash loans are one of the main features of Aave. While DeFi lending typically requires collateral, most lenders (like MakerDAO) allow users to borrow up to 75% of available collateral to protect against market volatility.

In turn, Flash Loans work through a smart contract, with which you can borrow funds without collateral with the condition that the loan will be repaid within one transaction (one block). The method is used by traders to make money on arbitrage, since it makes it possible to borrow funds unlimitedly for free until the loan is repaid.

This is quite difficult for a beginner, and the developers recommend using this lending method only for those who are well versed in Ethereum, programming and smart contracts.

Flexible interest rates

The interest rate strategy on the Aave platform is calibrated to provide maximum performance optimization and reduce risk. Interest rates on loans depend on the utilization rate of a particular cryptocurrency. It is based on the indicator of the presence of cryptocurrency in the pool:

• If there are enough funds, then low rates are set, which stimulate lending.
• If funds are scarce, high rates are set for liquidity providers to encourage them to invest capital.

A nice feature of Aave is the ability to switch at will between fixed and variable interest rates, choosing the most profitable option at a particular moment. Thanks to this flexible structure, Aave has been in high demand since its deployment. Fixed interest rates are not exactly fixed, but rather simply more stable and less susceptible to market fluctuations.

Development prospects

As part of the project, cryptocurrency is loaned to an anonymous client. From the point of view of the traditional banking system, this is completely unacceptable, because there is no real security and the possibility of using legal leverage. However, the traditional financial industry has to come to terms with the spread of new realities.

It turns out that providing collateral in the form of the LEND cryptocurrency, which is not as volatile as other tokens, is quite enough to conclude contracts. The operation of the smart contract mechanism helps reduce risks when concluding transactions to a level that is considered quite acceptable by users.

When deciding what future awaits aave, it is hardly worth looking into the distant future. An actively used service has been created that allows individual users to:

• receive passive income;
• instantly receive loans on acceptable terms.

This state of affairs brings closer the recognition of cryptocurrencies as full-fledged, legally used assets that circulate on equal terms with fiat money, gold and others.

How to make money on deposits

You need to connect to the pool using any decentralized wallet, for example, browser-based Metamask. There must be funds on the balance. Then click the “Deposit” button next to the asset you want to deposit (coins and tokens running on the Ethereum blockchain are supported). Once the transaction is completed, you will start earning interest. In this case, the deposited tokens are converted into an equivalent amount of aTokens .

aTokens holders receive continuous income based on the following indicators:

• 70% commissions on flash loans.
• Interest rate on loans. The average borrowing rate multiplied by the currency utilization rate. On the main page or in your personal account, the specific current rate for the desired token is always indicated.

You can also go to the page of any coin to view the history of interest rate changes.

There is no minimum or maximum limit, but if you deposit too little, there is a risk that the transaction costs of the process will exceed the profit. For one asset, a one-time deposit is allowed at either a stable or variable rate, but not both options at the same time. You can withdraw funds at any time without any penalties.

Value of blocked assets, capitalization and DEX volumes

On Saturday, December 4, the volume of funds frozen in DeFi protocols reached an all-time high of $14.8 million.

Data: DeFi Pulse.

At the time of writing, the figure had adjusted to $14.51 billion. Maker took the lead - its dominance index is 18.6%.

Maker accounts for $27 billion of all funds in DeFi protocols. The composition of the top five has not changed over the past three weeks, but Uniswap has dropped from first to fifth place.

Data: DeFi Pulse.

The capitalization of the DeFi token market has reached a record high of $18 billion.

Data: DeFiMarketCap.

Trading volume on decentralized exchanges over the past 30 days amounted to $16.69 billion. Compared to the previous similar period, the figure decreased by 3%.

How to get a loan

Lending on Aave allows you to obtain working capital without selling your assets. To get a loan, you must deposit any asset that will be used as collateral. Then go to the Borrowing section and click Borrow on the asset you want to receive. Set the desired amount (the maximum amount depends on the available deposits used as collateral).

Choose a stable or variable rate - you can change it later at any time by simply going to the dashboard and clicking the button to change the APR type for the desired asset.

The interest rate depends on the relationship between supply and demand for a given asset. In this case, the stable one remains the same as it was at the time of taking, and the variable is constantly changing. There is no fixed loan repayment period. The main thing is to maintain the so-called “health factor”, an analogue of LTV, at the proper level.

yEarn.Finance acquired SushiSwap and five other DeFi projects

On December 1, the yEarn.Finance protocol announced the takeover of SushiSwap, a fork of the leading non-custodial platform Uniswap. As part of the transaction, funds locked in SushiSwap (TVL) will be transferred to yEarn.Finance.

After closing the deal, the project will have nearly $1.2 billion in funds at its disposal. This will make yEarn.Finance the second largest decentralized trading platform (DEX) after Uniswap. The latter's TVL is estimated at $1.36 billion.

According to AndreCronje, the creator of yEarn.Finance, the feasibility of merging yEarn.Finance and SushiSwap is largely due to the similar functionality of the projects.

“YEarn.Finance's strategies require the expertise of a customized AMM [automated market maker]Swap pushes the boundaries of yield farming and money markets,” he emphasized.

SushiSwap will also help yEarn.Finance with the launch of the Deriswap platform. It will present swaps, options and implement a lending function.

This is the sixth takeover initiated recently by Cronje. Previously, yEarn.Finance was integrated with the Cream landing protocol, the Pickle Finance project and the Argent wallet, the Akropolis project and the Cover Protocol peer-to-peer insurance market.

Purpose of the LEND token

Aave's native token, LEND, is an ERC-20 token with a total supply of approximately 1.3 billion, of which a billion was sold during the ICO stage. It was initially used as a utility token of the ETHLend platform, which helped reduce fees, improve interest rates and LTV.

However, when ETHLend was replaced by the decentralized platform Aave, the LEND token gained additional uses, including platform management. Token holders have the right to vote on proposals from the development team regarding key parameters of the system.

Story

It all started in 2022, when a product created and developed by Stani Kulechev’s team appeared. It was originally a lending platform called ETHLend. An important step in the company’s future was made in November of the same year: during the ICO, it was possible to raise $16 million. For this purpose, 1 billion new crypto was placed.

The ETHLend framework for the project turned out to be tight, not allowing further development. Therefore, a rebranding was carried out in September 2022. This is how the aave protocol in its current form was born. The year 2019 is marked by the next step - the abandonment of the P2P approval system and the transition to the use of a pool where decentralized assets are used.

With the most extensive capabilities to enable DeFi, Aave is well established in the decentralized finance lending space in 2022.

Where to store LEND

Any wallet that supports ERC-20 tokens will do. The list of such wallets is quite large, for example:

• Web wallet MyEtherWallet
• MetaMask browser extension
• Desktop and mobile Exodus
• Hardware Trezor, Ledger, KeepKey
• Desktop and mobile Atomic Wallet

Choose options with a proven reputation and a high level of security.

Safety

How high is the security level offered by defi in general and aave in particular? Decentralized financing has provided access to a qualitatively new level in this regard, and the platform in question has gone even further.

Placing deposited funds using a decentralized lending pool was an important step towards guaranteeing the safety of investments. Let's add to this the possibility of partial compensation of losses, for which a decentralized insurance fund was created.

As for the public open source smart contracts, an independent audit was carried out, which gave a positive conclusion.

Where to buy/sell LEND

You can purchase the LEND token on the Binance, HitBTC and AEX exchanges. As an example, let’s consider buying an asset on Binance - this is the most popular and in-demand crypto exchange with wide functionality and the ability to buy cryptocurrency for fiat (after verification).

The process looks like this:

• Create an account at https://www.binance.com/ru or log into an existing one.
• Top up your account if necessary. On our website you will find material with a detailed analysis of all methods of depositing and withdrawing funds to Binance.
• Go to the “Spot Wallet” section and use the search bar to find the LEND token we need.
• Click the "Trade" button.

• Choose which currency pair suits you. At the moment, LEND is traded in pairs with BTC, BNB, ETH, BUSD, USDT.
• Select the type of order (the market allows you to instantly buy an asset at the market rate, and the limit allows you to specify your price, and then the purchase will be completed as soon as the rate reaches this level).

After receiving tokens, try to immediately withdraw them to an external wallet for further storage if you do not plan to continue operations with them in the near future. Storing on an exchange is not considered safe.

Money on Chain launched a decentralized exchange on the RSK sidechain of Bitcoin

The developer of DeFi protocols with collateral in bitcoins, Money on Chain, announced the launch of the automated decentralized exchange Tex based on the RSK protocol.

The platform processes orders in batches at intervals of several minutes. Each execution (cycle) corresponds to applications sent to the blockchain.

A trade in a cycle is executed at the same average price between all orders submitted by traders. Limits indicate the maximum or minimum acceptable cost. Additionally, Tex integrates oracles to monitor price changes between cycles.