How to Buy Aave (AAVE)

Aaave is a decentralized Ethereum-based lending platform launched in 2017 to give this opportunity to crypto owners to receive loans. The process is based on smart contracts, which means every step of borrowing and lending crypto is automated. The borrower should keep cryptocurrency assets as collateral and receive 80% of that amount as a loan. All the processes of calculating the loan terms and giving the loans to the borrower are done automatically via smart contracts. Therefore, no one has access to this process as a third party. The process of lending and borrowing is also done from liquidity pools. Thus, the borrower and the lender won’t know each other either. Aave network was called Ethlend but it was renamed to Aave in 2020.

Aave coin is the name of the native coin of this platform which is an ERC-20 token. The first token of this platform was called LEND token, which was released in November 2017. After the network was rebranded to Aave in 2020, the token name changed too. Every 100 LEND tokens are swapped with 1 Aave. This token is a utility coin, which allows its owners to vote on changes to the rules and policies of the network. Therefore, Aave coin owners are like stakeholders in this system and have the power to decide on important rules. Aave coin is not minable, the max supply of this crypto is 16 million tokens. It was ranked 9th in the list of top DeFi tokens by market capitalization in 2022.

Aave is a secure platform as safe as the Ethereum network. The use of smart contracts is both good and bad for this platform. First, it won’t let any third-party access your coins during the process of borrowing. But since Aave doesn’t offer insurance on its platform, somehow, user funds might not be protected. As a result, the coins that might have been sent to the wrong address or lost will not be reimbursed. However, this is not something you should worry about. As long as you want to keep your coins as an investment, having a secure wallet is the most important thing for you.

Aave tokens are called utility and governance coins. The main use of this token is for voting on the system to propose new features and ask for updates. Since Aave is a lending platform, its tokens are mostly used as collateral. Although borrowers can use different crypto as collateral on this platform, if they use AAVE they will get a discount. You can swap a limited amount of Aave coins with any other crypto. But it is not usable for purchasing goods. However, it might be possible in the future.

Meanwhile, most people buy Aave coins to receive a loan on the Aave network or keep the coins as an investment. The price history of the Aave coin showed it could be a profitable investment in the past. If you want to hold these coins as an investment, be patient and keep watching their price. If you are a beginner, only invest as much money as you afford to lose because the future of cryptocurrency is unpredictable.