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What Is Aave?

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Dec 1, 2022
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4 min read
what-is-aave

This blog post will cover:

  • About Aave (AAVE)
  • Where did Aave (AAVE) come from?
  • What are the advantages of Aave (AAVE)?
  • What are the disadvantages of Aave (AAVE)?
  • How to buy Aave (AAVE) on SimpleSwap?

About Aave (AAVE)

Aave is a decentralized platform that was created so that users can both lend and borrow cryptocurrencies. To use this platform, no intermediary or documentation is required at all. In fact, Aave was almost the first DeFi (decentralized public blockchain-based financial services ecosystem) lending protocol. Now it's worth talking about how it works. Today they offer lending support for 17 different cryptocurrencies. There is a place (“pool”) where lenders put their personal funds. Therefore, different users can borrow from these pools. To prevent any volatility within the protocol, each pool allocates a small percentage of the assets as reserves. Lenders can withdraw their funds at any time due to the borrower’s collateral. A loan that can be taken is up to 75 percent of the collateral. It guarantees creditors a full refund at any time. In case the loan is not repaid, the borrowers forfeit their collateral. If you have a deposit on the Aave platform, you can take out a loan using your deposit as collateral.Aave uses its own token, which grants discounts to borrowers.The main goal of the platform is to eliminate the deficiencies that centralized giants like PayPal, Coinbase, and Skrill had.The Aave Protocol, which is an open and non-custodial protocol for creating money markets on the Ethereum blockchain, is the main product of the platform.

Where did Aave (AAVE) come from?

The team behind the development of the Aave platform consists of diverse creators from different countries. The platform's CEO is Stani Kulechov. Chief Operating Officer - Jordan Lazaro Gustav. Stani was the founder of ETHlend (a marketplace where lenders and borrowers discussed the terms of deals without third parties), and Jordan was also COO here. But they soon decided they were ready to take it to the next level and make a name in the DeFi space. Thus, they shifted their roles to Aave. Since then, ETHlend became a subsidiary of Aave.The team also has a creative director, several managers, and software engineers. According to the latest data, the team consists of 26 people.The London company Aave got its name from the Finnish word “ghost”. It was created in September 2018.

What are the advantages of Aave (AAVE)?

  • Own tool for monitoring the data
    
    Aave provides users with Aave Watch which is a tool for continuously tracking key performances such as loans and fees.
  • Flash borrowings
    
    A distinctive feature of the Aave platform is the ability to take out an urgent loan without collateral. In this case, an individual smart contract will borrow assets from Aave's reserve pools in a single transaction.
  • Stable rates
    
    The platform allows borrowers to switch between fixed and floating interest rates. This is an advantage in an unstable decentralized marketplace.

What are the disadvantages of Aave (AAVE)?

  • Only native tokens
    
    A significant drawback is that the platform provides all the benefits of the service in the case of using native AAVE tokens. It can reduce the number of potentially involved users.

How to buy Aave (AAVE) on SimpleSwap?

Now you know about the advantages and disadvantages of the Aave platform and its AAVE token. If you want to buy the AAVE token, you are welcome to use the SimpleSwap service. And so that you do not get confused, we suggest you read the instructions:

  • For example, you want to swap BTC for AAVE. Select the currency you want to exchange (e.g. BTC) in the first drop-downlist. Then enter the amount you want to swap.
  • Select AAVE in the second drop-down list. You’ll see the estimated amount that you’ll get after the exchange.
  • Click the Exchange button.
  • Enter the Recipient's Address. AAVE will be sent. Be careful and make sure you use the correct address.
  • Create the exchange.
  • You will see the Bitcoin deposit address. You need to transfer the necessary amount of BTC to this address to start the BTC to AAVE exchange.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

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