Modern virtual currencies play a huge role in building a good financial system. Physical currency began its existence a long time ago, but its role has diminished as new forms of payment emerge.
Cryptocurrency is a digital currency without a central regulatory authority where cryptographic techniques are used to guarantee transactions. A common question that comes up with cryptocurrencies is how are they managed and controlled? Our global economy is governed by governments and financial institutions that regulate and control the market. However, in the world of cryptocurrencies, things look different. Aave, for example, is not controlled by an individual or organization. Instead, it is a decentralized community that helps keep all transactions running smoothly. Simply put, you could say that there is a list of who owns Aave and how much each user owns. The list is available on several computers around the world (called nodes) and is constantly updated. The list is mapped between computers, and if the information in the list does not match between them, then illegal activities are easy to detect.
There are over 1300 different cryptocurrencies today that are based on blockchain technology. Of these, just over 350 have a market value of over $ 10 million. Just under 30 are worth over $ 1 billion!
What is the relationship between cryptocurrencies and blockchains? Simply put, blockchains mean we can digitally store value in a way that we never could before. To the uninitiated, the possibilities of blockchain technology may not be obvious, but this technology is as revolutionary as the development of the Internet and mobile telephony over the past two decades. This technology has potential applications in various industries. For the financial industry, this means, among other things, that secure transactions can be carried out without the need for a third party. This will mean a huge difference in the efficiency of the financial system and the role of banks in transactions will disappear.
Today we will talk with you about an interesting “ghost” cryptocurrency - Aave.
What is Aave? A Brief History of Aave
Aave is one of the most popular decentralized contracts in the much-touted DeFi financial system, with which you can deposit cryptocurrencies and earn interest and borrow assets entirely without third party intervention. Defi's decentralized financial system was created with the goal of recreating and replicating financial services that until now were only available in the traditional system, and makes them better, more modern and more profitable for the individual investor. The system is based on smart contracts and so-called Dapps, developed on the basis of the blockchain technology of the famous Ethereum platform, of which Aave is one of the most advanced and most used.
Aave was launched in 2017 by Stani Kulchov under the name ETHLend and was marketed then as a platform for borrowers. Stani Kulechev is the founder and CEO of Aave, an open and non-custodial liquidity market protocol for earning interest on deposits and borrowing assets. Since then, Aave has enjoyed success and is still used by enthusiasts and ordinary consumers in the world of cryptocurrencies for lending and borrowing.
How does Aave work?
Aave is an open source decentralized protocol with which users from all over the world can join to borrow assets and deposit assets for others. Thus, it is a D-application (decentralized application) for Peer 2 Peer lending, where users can borrow and lend assets entirely without the involvement of a bank, lawyer or other third party.
A platform like Aave allows you to lend capital or borrow assets and generate interest income entirely without complex processes, integrity constraints or costly costs. Unlike the loan process in the traditional financial system, Aave does not require any application forms, bank or government approval, or personal information disclosure.
The protocol was created using the Ethereum blockchain technology, through which all registered users can create smart contracts, eliminating the need for external parties. In other words, you are free to use the open source Aave platform to build your own applications and protocols to improve your product (what you borrow or can offer as collateral for a loan). Aave makes it easy, flexible and more profitable to take out loans against cryptocurrency as collateral, as well as act as a lender and lend assets in order to be able to earn money at interest.
All deposits through Aave are automatically distributed in smart contracts, marked with an individual, publicly available code. All contracts are open source and audited to ensure the safe storage of your assets. Withdrawals can be made at any time, and you can also use aTokens (LEND) tokens to move and trade other cryptocurrencies on Ethereum.
Aave allows you to make new investments without having to sell assets.
Why take out a loan instead of selling the assets you already have and financing your new investments with them? To avoid closing long positions and losing potentially good value over time. With Aave, you don't have to choose between existing investments and new ones that you want to make, and instead, you can borrow capital with existing assets as collateral. The same applies if you suddenly need capital for unforeseen expenses, which is also not interesting for liquidating assets that could bring significant profits in the future.
The maximum loan amount depends on the value of your assets.
Should traders invest in Aave?
Anyone looking to invest in AAVE is probably wondering if it is worth making such an investment. After all, AAVE is one of the most important DeFi tokens and many experts are predicting rapid growth in the DeFi market. This is exactly the kind of growth that stakeholders can see in DEFI Pulse as well.
As of early February 2021, the total value blocked (TVL) was $ 32 billion, with no end in sight. The DeFi market is an interesting investment opportunity for investors. In established financial markets, key interest rates are at historically low levels, so it makes perfect sense to invest in riskier and higher-yielding assets.
Aave is probably one of the most important DeFi tokens on the market today and was previously called LEND. The project has been on the market since 2017 and is considered a longtime veteran of the crypto sector. But lately, the project has grown a lot.
The new year will be interesting for the project. Due to the positive development of the DeFi market, it can be assumed that AAVE will continue to rise in value in the coming months and years. Investors looking to build a diversified crypto portfolio should consider investing in DeFi tokens. DeFi tokens have shown low correlation with traditional cryptocurrencies in recent months.
The continued positive development of AAVE is supported by the limitation of the maximum number of coins that can be traded to 16 million AAVE tokens. Limiting the number of tokens counteracts the strong inflation of circulating coins.
Forecast and price dynamics Aave
How can the price of Aave evolve in the coming months and years, and what does the consensus look like among experts assessing price dynamics?
Why can Aave, despite its governance token status, be an interesting investment? The Aave 16 million limit is positive for investment. There are already more than 12.5 million AAVE in circulation, which means that a sharp inflation of the coin is out of the question.
Overall, Aave is considered one of the most popular DeFi apps, which is why many crypto investors are already investing in Aave coins today. We expect Aave to continue to benefit significantly from the growing demand for DeFi.
Wallet Investor's AI-powered analysis also shows that Aave can be a good investment. Aave can really prove itself as a profitable investment.
Walletinvestero estimates that the price of AAVE in 2025 will be around $ 3,300. Based on the price at the beginning of the year, this forecast means a tenfold increase in the current price level.
On the other hand, the Digitalcoin Price assessment is not so positive. Experts expect the current price level to triple by 2025, which is still consistent with good development.
We believe AAVE is an attractive investment. After all, the DeFi market is expected to grow strongly in the coming years. However, the demand for cryptocurrencies is likely to be decisive for the rise in prices. We expect more and more investors to seek alternative investments if key central bank interest rates remain at historically low levels.
How to invest in Aave in Nigeria?
When invest in Aave in Nigeria, you have a choice between the following options:
- Trade cryptocurrencies with online broker certificates (CFD trading);
- Buying a basic "real" cryptocurrency on a cryptocurrency exchange.
CFDs are financial derivatives where you buy “long” and “short” sales of the selected cryptocurrency. Then you can take advantage of the price fluctuations without having to understand the real technology behind cryptocurrencies. If you buy "real" cryptocurrencies on a cryptocurrency exchange, you can send them to your wallet. You are solely responsible for your wallet and are your own bank.
Benefits of CFD trading:
- High security.
- Easy Login.
- Trading with leverage is possible.
- You can take advantage of price fluctuations.
- You don't need a wallet for storage.
Both options offer great opportunities to take advantage of the impending cryptocurrency boom. If you are technically interested in blockchain technology, "real" cryptocurrencies are for you. If you are more interested in cryptocurrency trading and price dynamics and do not want to own digital currencies for longer periods of time, then CFD trading is perfect for you!
On the platform, you buy not the base cryptocurrency, but a financial product that corresponds to the current price of the selected cryptocurrency, they are called contracts for difference (CFDs).
This means that the investor is speculating on price dynamics, which can move both up and down.
The trading platform offers the ability to trade with leverage. Also the ability to adapt the leverage to your own strategy is an advantage of CFDs.
Where can you buy Aave?
Are you looking to buy Aave in Nigeria? It's easy! You can make a purchase on a crypto exchange or on a trading platform. With the purchase of Aave, you will have absolutely no problems. Online trading platforms will provide you with a lot of useful and necessary tools, as well as information for fundamental and technical analysis of the financial market. Aave is also available on almost all major cryptocurrency exchanges, including Binance, Uniswap, Huobi, and others. To buy cryptocurrency, you can use Binance, a popular crypto-to-fiat exchange.
Trading digital currency has become easier today - there are many platforms available to get started with cryptocurrencies. Cryptocurrency is said to be the new Internet - a technology used to decentralize payment methods between individuals, companies and other entities without the control of a central bank.
But it is especially popular to speculate in cryptocurrencies - to which more and more people are opening their eyes.
Aave has gained a lot of credibility with its traditional banking services. This puts digital currency in a very relevant position today, and it is undoubtedly more than an interesting alternative to participate, closely monitor and invest in.
What is the future for Aave in the market? When talking about cryptocurrencies and their future, there will always be uncertainty.
In any case, experts say that the very specific characteristics that distinguish Aave from other virtual currencies allow you to maintain your market position even in the presence of ups and downs in its price. Invest today to make a profit and successfully gain a foothold in the world of cryptocurrency!