Aave is a decentralized lending platform that rose to fame during the decentralized finance (DeFi) boom in 2020. The system enables users to borrow, lend and also earn interest on crypto assets in a full peer-to-peer (p2p) way without the use of middlemen. Aave is built on the Ethereum blockchain that uses its smart contracts to autonomously facilitate lending operations. This means users don’t need to trust a bank or lending institution to manage their funds. They just need to trust the code to execute everything for them.
Much like other DeFi platforms, Aave users seeking a loan must first deposit cryptocurrency to use as collateral. The amount of money they can borrow is limited by how much collateral they first deposit. The loan then takes the form of a special token called aToken. This is pegged to a value of another asset and is encoded in a way that lenders receive interest on their deposits.
For example, a borrower can deposit collateral in Dai (DAI) and then receive a loan in ETH. The borrower can choose several different cryptocurrencies helping them get various coins/tokens without actually having to own them.
Aave is a Switzerland-based company founded in 2017 by Stani Kulechov. The firm raised over $16 million during its 2017 initial coin offering (ICO) and was initially called ETHLend after a 2018 rebranding turned it to Aave. AAVE is the system’s native token and acts as a governance token. AAVE holders can vote on changes to the protocol and network policies.
YouHodler aggregates prices from top centralized exchanges to provide an accurate Aave price and charts.
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The best way to earn interest on Aave is by depositing it in a YouHodler savings account. Interest payments occur weekly and YouHodler features compounding interest.
You can get a loan with Aave in stablecoins by depositing your Aave as collateral. YouHodler offers the best rates you can get anywhere. Don’t sell your crypto. Use it as collateral and keep its value for later.
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