Aave $AAVE Wiki: Coin History, Techstack, and Crypto News

Aave is one of the decentralized cryptocurrency that deals in decentralized lending. The system allows users to borrow lend and earn interest on their crypto investments without need of a middleman. Aave is a system of smart contracts running on the Ethereum Blockchain that enables assets to be managed by networks of computers that run its systems.

Aave has a system of lending pools that allows lenders to deposit cryptocurrency they would like to lend into a liquidity pool. Borrowers are able to take out a loan from these pools. Aave is able to carry this out by offering two types of cryptocurrency tokens, the AAVE, which is the native cryptocurrency of Aave, and aTokens which are given to lenders so the collection of interest on deposits can be made easier.

History

Aave was created in 2017 by Switzerland based Stanley Kulechov. It was originally known as ETHLend. ETHLend originally raised $16.2 million in it’s initial coin offering from the sale of 1 billion units of the AAVE Cryptocurrency which was originally known as LEND in 2017.

They changed LEND to AAVE in 2018 by transferring the value of 100 LEND to 1 AAVE. This dropped the supply of AAVE in circulation to around 18 million AAVE.

The major difference between ETHLend and Aave was how they facilitated borrowing and lending of finances. ETHLend tried to match lenders and borrowers through peer to peer transactions while Aave matches them through pooling of funds. ETHLend continues to exist as a subsidiary of Aave.

Biggest Claims to Fame

Aave users do not use middlemen in their transactions. They do not need to trust a person or institution with their funds. This removes the element of human error or greed from their transactions. They only need the code to run as written for their funds to be safe.

Aave users can lend or borrow up to 17 different cryptocurrencies on the platform. The system is designed to handle several cryptocurrencies at a time without issue and this allows for the use of those cryptocurrencies in carrying out transactions, borrowing or lending cryptocurrency.

Aave has a protocol known as the safety Module(SM) that allows participants to stake their own AAVE tokens as insurance in case there happens to be a liquidity deficit. This gives those who have a stake more AAVE tokens as Well as giving them a percentage of the protocol fees.

Borrowers have to post collateral on the currency they are trying to borrow and they cannot borrow currency on a value above that. This allows for another level of safety within the borrowing or lending of cryptocurrency.

Biggest Criticism

Aave does not allow for traditional money on their platform. Users must buy cryptocurrency in order to use the Aave platform. ETH is the most common form of cryptocurrency used on the platform as Aave is based on the Ethereum blockchain, though the cost of Ethereum is at times considered too high for use of Aave when borrowers can use other platforms.

There is risk involved in the use of Aave. In case a loan is not returned, collateral is liquidated. The liquidation may not make up for the debt in which case the Safety Module protocol is put in place. In case everything works out and remains calm,the Aave users who staked their currency get their AAVE back with interest. If things do not stay calm, they loose their stake. Many find the risk not to be worth it.

Users can only borrow or lend the seventeen cryptocurrencies the Aave platform supports. This is an issue to those who own the up-and-coming cryptocurrencies that are not supported by the platform The seventeen cryptocurrencies Aave supports are the well-established ones that closes out a majority of the cryptocurrency market users who consists of smaller cryptocurrency markets.

Team

Aave was founded by Stanley Kulechov. He studied law in the University of Helsinki. He got interested in Ethereum while still a student and begun exploring how the platform could influence or change traditional financial systems. He created ETHLend in 2017 which was changed to Aave in 2018.