Introducing AAVE: The World’s Leading DeFi Protocol (Project Analysis)

🤔What is AAVE?

Aave (formerly known as ETHLend) is an open-source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets.

Launched in 2017 by Stani Kulechov, the protocol is built on top of the Ethereum network but is also interoperable with Polygon and Avalanche.

The TVL (Total Value Locked, the main index to define the degree of adoption of a protocol) of the project’s smart contracts exceeds $20B, making AAVE the largest DeFi protocol in terms of locked liquidity.

AAVE’s TVL is over $23B. Quite impressive!

🗳️A utility token: $AAVE

Governance

AAVE Governance Tab

The protocol itself uses a DAO (Decentralized Autonomous Organization); which means the project is led and governed by $AAVE token holders.

Staking

AAVE Staking; The “Safety Module”

$AAVE tokens can also be staked in the “Safety Module”, a mechanism that acts as an insurance system in case of a Shortfall Event (event causing a state of deficit for the liquidity providers) within the money markets that belong to the Aave ecosystem.

Although the use cases for $AAVE are currently limited, its community is very active and new use cases may emerge in the coming years.

🔥Why could the V3 of the protocol be a game-changer for the DeFi ecosystem?

AAVE V3 contains various additions/changes which greatly improve the protocol compared to its V2:

Portal🌀

Allows assets to seamlessly flow between Aave V3 markets over different networks

High-Efficiency Mode🔝

Allows borrowers to extract the highest borrowing power out of their collateral

Isolation Mode🔗

Limits exposure and risks to the protocol from newly listed assets by only permitting borrowing up to a specific debt ceiling

Risk Management Improvements🔐

Provides additional protection for the protocol through various risk caps and other tools

L2-Specific Features🛣️

Designs specific to Layer 2 networks to improve user experience and reliability

Community Contribution🕺

Facilitates and incentivizes community usage through a modular, well-organized codebase

All these exciting new features will definitely make AAVE one of the most resilient and secure DeFI protocols on the market! 💪

🗺️2022 Roadmap

In addition to the imminent launch of its V3 on various mainnets, AAVE also plans to launch a mobile app as well as a social network framework named Lens.

Even if the details and launch dates of these two new products are still unclear, there is no doubt that they will only strengthen AAVE’s dominance, making its lending ecosystem stronger than ever.

🚀$AAVE Price Prediction

With an ATH of $661.69 reached on May 18th, 2021, $AAVE is down to $170 at the time of writing, which is equivalent to a drop of almost 75%.

However, the safety and potential of the project remain unchanged; the fundamentals of AAVE are strong and it could well be one of the catalysts of the next bull run.

With a Total Value Locked of over $20B, AAVE’s market cap may be undervalued by a factor of 5.

For a deeper analysis, you can take a look at this video from CoinBureau (an amazing crypto-focused YouTube channel, we highly recommend it) about AAVE.

Be careful with your hard-earned money. Always consider DYOR (Doing Your Own Research) before investing in a project.

🚨Disclaimer

The analysis above is not intended as financial advice.

This article has been written to be understandable to everyone, including ecosystem beginners; Thus, many shortcuts have been taken to keep its length to a minimum.

GAINS Associates is the World’s First Decentralized VC, allowing anyone that holds $GAINS to invest in the crypto unicorns of tomorrow. With over 4 years of experience and several ultra-high return deals, we are removing the barriers of entry to investing and changing the world, one deal at a time.

GAINS stands for Group Action Is Never Small, embodying the collaborative spirit that is the essence of blockchain and decentralization.

In addition, GAINS provides daily news, articles, video interviews as well as fun & educational events.

Website | Telegram ANN | Telegram Group | Discord | Twitter | YouTube

--

--

--

World's First Decentralized VC - Ultra High Return Deals for EVERYONE - #Crypto news, insights, research. JOIN US NOW! 👉 http://t.me/GainsChat! 🚀🔥

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Disaggregated blockchain layers & evading socioeconomic fragmentation

What Blockchain Enthusiasts Are Not Saying About Security

Ludena Protocol Partners with Korea’s Largest Digital Art and Game Design Institute SBS Academy.

Blockchain Revolution: Part Eight

An Update on the GoChain Node Network

Part 1: Introducing the VeChainThor Blockchain Transaction Model

Monthly News Letter : July 2019

Summary of “Fat Protocols”

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
GAINS Associates

GAINS Associates

World's First Decentralized VC - Ultra High Return Deals for EVERYONE - #Crypto news, insights, research. JOIN US NOW! 👉 http://t.me/GainsChat! 🚀🔥

More from Medium

metaCOLLECTIVE DAO [April update]

Ojamu Partners with Innovative DeFi Company, Ferrum Network

The DeFi market: 6 months of massive growth

KSM Starter IDO Spotlight: Metaverse Lab