Should You Invest in Aave?

New crypto opportunities seem like they’re popping up all of the time. Aave is a lending protocol that could provide several ways to benefit your portfolio, and we’re going to take a look at whether or not you should utilize Aave in your investment strategy.


  • AAVE
    Aave
  • Price
    $ 87.07
  • Change
    1.18%
  • Marketcap
    $ 1.20 B
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Aave is a dynamic contributor to the decentralized finance industry. It offers both a means of investing in different cryptocurrencies and a currency you can purchase.

You can invest in Aave, and you can use Aave platforms as a means of investing.  That said, what makes Aave better than the alternatives?

Does it show a lot of growth potential? Who owns the company, and what direction do they plan to take it?  We’re going to explore this and more, figuring out whether Aave is the right fit for your strategy. 

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What is Aave (AAVE)?

Aave is a lending source that’s every bit as open-source and decentralized as the cryptocurrencies it deals with.  It’s built into the Ethereum blockchain, so there’s no doubt about its legitimacy. 

It’s a user-minded platform that allows people to engage with money in ways that they typically would not be able to with standard currency. 

You can use Aave to invest in cryptocurrencies on your own or in pools. That’s nothing new, but it’s helpful in the same way that Webull or Robinhood is for investing in the stock market

The unique thing is that you can borrow cryptocurrencies from your pools in exchange for an interest fee.  These loans can help you make different investments, grow your portfolio, and more without dealing with an intermediary agency like banks or other lenders. 

Who Are the Founders of Aave?

Stani Kulechov created Aave in Finland. The initial project was known as ETHLend, playing on the idea that you could lend and borrow money through the Ethereum blockchain. 

The initial project had trouble pairing the loans and requests with lenders who could match them, giving them a startup difficulty with liquidity.

There was a poor set of circumstances for that project, and it was forced to be trashed.  Stani got back to the drawing board, though, changing one key aspect of the peer-to-peer lending process. 

Instead of using the same lending structure, Aave uses smart contracts which are more secure and reliable than the original structure. 

How Many Aave (AAVE) Tokens Are in Circulation?

There are 16,000,000 Aave coins in total. Aave coin is complex, though, because the initial LEND tokens migrated to the Aave protocol. 

LEND tokens are worth 1/100 of an Aave token. 13,000,000 Aave tokens go to previous LEND holders, and the remaining 3,000,000 tokens go to the reserve. 

It’s possible to mine Aave coins, but the platform’s popularity has taken off, making it more difficult to justify doing so. The more interest a cryptocurrency gains, the more costly and complex it becomes to mine for coins. 

Aave miners got off to a bad start when the company launched because of the portion of coins that already existed in circulation. 

The great thing is that there are numerous ways to engage with Aave, so mining doesn’t have to be your only option if you’re not up for it.

How is Aave Secured?

One has to either purchase from the platform or mine it to secure Aave coin.  In terms of financial security, Aave has a safety module to operate as collateral of last resort for staked Aave.

Staking is effectively backing Aave with your own tokens to provide financial support for the network.  It’s risky to stake your tokens in the event that Aave was to take a significant hit. 

That said, there are benefits to staking. This staking for benefits program is called their “Safety Initiative,” and participating in it opens you to rewards distributed to all members involved.

At one point, they distributed around $18,000 per day across the staking group.  That number is subject to change in relation to the coin’s success.

Further, Aave has a sophisticated arsenal of cybersecurity protocols that defend against any manipulation or malfunction of the system. It’s very well situated.

What Makes Aave Unique?

Aave is a unique cryptocurrency because of how dynamic the platform is. There are so many ways to invest, lend, and borrow within Aave that it gives individuals many opportunities to make money. 

It’s an excellent choice for consumers who are new to cryptocurrency investment or want to make diverse investments and play the field.

Further, the currency is backed by the individuals who own it, which means that stakeholders have a vested interest in making Aave grow. There’s more interaction with the actual people who engage with the currency than in other cryptocurrency options. 

Allowing individuals to lend and borrow from one another speaks to the spirit of what decentralized currency is all about. If you’re going to borrow money with an interest rate, why not have the benefactor be an individual rather than a large corporation?

Further, Aave is deeply intertwined with Etherium’s blockchain. As the second-largest and most successful cryptocurrency, that is a reassurance of the quality of Aave’s infrastructure.

Aave Alternatives

bitcoinBitcoin
$ 29,022.004.06%
ethereumEthereum
$ 1,941.913.64%
tetherTether
$ 1.000.06%
usd-coinUSD Coin
$ 1.000.05%
bnbBNB
$ 298.592.33%
xrpXRP
$ 0.407123.17%
binance-usdBinance USD
$ 1.000.18%
cardanoCardano
$ 0.5087944.2%
solanaSolana
$ 49.016.94%
dogecoinDogecoin
$ 0.0834664.03%

Should I Invest in Aave?

Depending on your financial goals, Aave could very well be a good choice. It’s worth getting familiar with Aave’s platform if you ever need a personal loan to move your portfolio forward. 

Further, some estimates show that Aave offers an annual yield of 8.41%.  That’s a significant annual return for an industry that’s largely volatile and uncertain.

That and the potential to engage with the Security Initiative for profit makes Aave something to consider seriously as you make your next financial moves. 

It’s always worth keeping an eye on the way these companies are doing before you make any decisions, though.  Watch how Aave performs for a while, and look at its history to get a good feel for what to expect.

If you get a good feeling, Aave might be an excellent way to boost your portfolio.

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