As DeFi continues to dominate the cryptocurrency headlines, several projects in particular are gradually coming to the fore as the leading proponents of decentralised financial services. As DEXs, liquidity pools and crypto leveraging services are increasingly becoming the focus of the industry, these exciting new projects are attracting much interest from investors.
Amongst the most outstanding of these projects is Aave. Essentially, Aave is a lending protocol that runs on the Ethereum network and, at the time of writing, it had some $13.3bn worth of crypto assets locked in - making it one of the bigger DeFi projects on the market.
Of course, Aave has its competitors. Compound and Liquidity are also gaining traction in the crypto lending space, but many industry experts believe that Aave offers the most complete package, with more features and options than rival protocols.
The network’s native cryptocurrency, AAVE, has also shown to be in high demand, as the price has soared by over 500% since December 2020. In the following Aave price prediction, we’ll take a look at whether the project has the potential to maintain its success over the long term and hear from other crypto analysts on what they predict AAVE will be worth by 2030.
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A Brief History Of AAVE
AAVE started life as ETHLend in 2017, set up in Finland by developer Stani Kulechov. It was reborn as AAVE in 2018, following an ICO that saw it expand its development team and secure significant investment for future growth.
However, the birth of AAVE signalled more than just a change of name. Whereas ETHLend had been a peer-to-peer lending platform, the developers soon realised the shortcomings of this system and shifted to a peer-to-smart contract system, in other words, they began to incorporate liquidity pools.
Users can supply their cryptocurrency to AAVE and in exchange, they receive a share of the interest paid by those borrowing from the liquidity pools. When borrowing from the liquidity pool, users must deposit a collateral amount greater than the amount they borrow, to safeguard against market volatility.
Users depositing to the pools are issued with A-tokens. These are Issued at a 1:1 ratio and are designated according to the cryptocurrency deposited and burned upon payback. For example, depositing DAI results in the issuance of aDAI tokens. These tokens then accrue interest, which is how lenders benefit from depositing their assets. What’s interesting about AAVE is that interest is accrued in real-time and applied directly to users’ wallets.
In addition to A-tokens is the Aave governance token, AAVE. This is an Ethereum-based cryptocurrency and those holding it can vote on the direction of the project. Due to the ongoing success of the Aave project, the AAVE has become hot property for investors and one of the biggest DeFi coins on the market.
Read Also: Could Aave Be A Millionaire-Maker Coin?
Can Aave See Off The Competition?
As we have already touched upon, there are a few projects competing in the DeFi lending space. Alongside Aaave, there’s also Alchemix, 88mph and Cream Finance. Maker is also an important project in this space. However, at this stage it’s probably fair to say that Compound is Aave’s main and most direct rivals, in terms of the service it provides.
Both platforms offer a way for to borrow cryptocurrency against collateral tokens, or lend cryptocurrency to earn interest. Both also use liquidity pools to provide their service and both issue users with a token relative to the cryptocurrency that they have deposited - ie a user depositing Ethereum into a Compound liquidity pool would receive cETH, whereas depositing into Aave would yield aETH.
However, whilst Compound is certainly an older DeFi and one with a great deal of support in the industry, Aave currently has the edge when it comes to assets locked into the protocol. At the time of writing, Aave holds approximately $13.3bn, making it the market leader in the lending space, whereas Compound trails with $7.76bn.
One of Aave’s strongest selling points is the diversity of assets that it handles. Aave offers lending and borrowing in 23 different crypto assets, whereas Compound supports just nine. Aave also offers better lending rates to borrowers in return for their collateral - allowing borrows to take out up to 75% of their amount in collateral vs just 66.6% for Compound.
Some crypto experts would suggest that Aave has surpassed Compound as a lending platform, but investors should be cautious here - there is still plenty of room for Compound to grow and ultimately the popularity of either platform will have a significant effect on its token price.
Looking At AAVE’s Price History
Just like other leading DeFi projects, Aave’s native token has performed well since its first day of trading. Whilst it did not see the first-day surges that Compound or Yearn.Finance did, AAVE has grown fairly consistently since the governance token was launched in 2020.
AAVE actually declined slightly after its first week of trading and spent most of October 2020 bumping against a $50 barrier. However, from November its price began to rise - and comparatively steadily for the cryptocurrency market. By the first week of 2021, AAVE had gone past $100 and finished January sitting at around $312, following a market upturn.
AAVE then saw a major price surge in early February, reaching as high as $529.26 before sinking back to around $324 before the month was out. Things were fairly chaotic across March and April, but AAVE generally bounced between $350 and $400 for much of the time.
May saw AAVE reaching its highest price to date - $661.69. This represented growth of around 500% for the year and well and truly established Aave as one of the leading lights in the DeFi space. However, following news of a regulatory crackdown in China, prices went into decline and by the start of June, AAVE was trading at around $365.
What’s Next: AAVE Price Predictions For 2025
Aave is emerging as one of the most popular DeFi projects in the space, with many believing that it offers the superior crypto lending service when measured against its competitors. Naturally, this suggests that AAVE could well be a good investment in future, but what do leading analysts have to say?
TradingBeasts is certainly optimistic with its AAVE price prediction for 2025. According to its technical analysis, the token will be holding steady at an average price just over $400 by the end of 2021, but will then begin a period of sustained growth, closing 2022 at $513.20 and reaching a potential high of $786 before 2023 is out. Going into 2025, the platform expects AAVE to be trading at up to $922.
Meanwhile, WalletInvestor has been more optimistic with its forecast. The platform predicts that AAVE will be worth over $800 per token before the end of 2021 and will then surpass the $1000 mark in 2022. By the time 2025 comes around, WalletInvestor expects AAVE to be trading at an average price of $3114.96 - representing price growth of almost 700% on today’s price.
Finally, DigitalCoinPrice’s long term AAVE price prediction falls somewhere between the two outlined above. It has the token reaching a very believable $537 by the end of 2021 and growing steadily across 2022 and 2024. The platform expects AAVE to reach $1,000 by the beginning of 2025.
Looking Further Ahead: AAVE Price Predictions for 2030
Whilst AAVE price predictions for 2025 carry some weight, those looking further ahead should be approached with caution. The world of blockchain changes extremely quickly and there is no telling what technology will be capable of by 2030. However, longer term price predictions are a good way to illustrate current market sentiment.
DigitalCoinPrice, for example, believes that AAVE will maintain its upward momentum well past 2025. It has the coin reaching an average trading price of $1,473.96 bu 2027 and will reach as high as $1,858.67 in 2028, making it likely that AAVE will have broken past $2,000 by 2030.
Another AAVE price prediction for 2030 can be found over at Coin Price Forecast. According to its technical analysis, AAVE will reach $2,000 as early as 2026 and by 2030 is expected to be trading at an average price of $2,464 - which would represent growth of 560% on today’s prices.
Once again, these predictions are highly speculative and should not be used as the basis of investment. The two AAVE price predictions for 2030 outlined above are best viewed as best case scenarios.
A cryptocurrency research firm by the name of Crypto Research Report is calling for Aave (AAVE) to reach $1800 by 2025, and $2,600 by 2030.
Read More: Aave Price Predictions
Conclusion: Should You Invest In AAVE?
If you’re someone that is already committed to cryptocurrency investment, then DeFi should already be on your radar. There are several projects in the space that are worthy of consideration and we feel that Aave is certainly one of them.
The concept of crypto lending has already proven extremely popular and as the blockchain world continues to replicate the functions of traditional finance, it is likely we will see more and more projects offering such services - but as we all know, being the market leader early on is an important factor in the world of cryptocurrency.
The reality is that Aave is starting to pull ahead of its competition and still has plenty of room to grow. Whilst there is certainly risk involved in investing in any emerging DeFi projects, there is also the potential for significant rewards - and that’s what investment is all about, after all.
All things considered, Aave is a solid option for anyone looking to invest in DeFi. Whilst its native token currently commands a high price, it has previously been much higher and with many analysts predicting future growth, now could be a very opportune time to add AAVE to your portfolio.
Where to invest in AAVE
If you’re looking to invest in AAVE then the first thing you’ll need to do is find a platform that actually lists the token. Fortunately, one of the leading crypto exchanges on the market, eToro, has recently started listing AAVE.
We recommend eToro for most investors as it is a highly accessible platform with plenty of tools to help you plan and execute your trades with minimal effort. There are also plenty of learning materials on the website, which can be invaluable to those new to cryptocurrency trading.
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AAVE Price Predictions 2025 - 2030 - FAQ
What is AAVE?
Aave is a DeFi project providing crypto lending services. Over the last few months, it has emerged as one of the market leaders in the space and currently has over $13bn worth of assets locked into its protocol. AAVE is the governance token of the Aave network.
How much will AAVE be worth in 2025?
No one can say for sure how much AAVE will be worth by 2025, but it’s fair to say that most analysts see it growing in value. For example, DigitalCoinPrice has the token approaching the $1,000 in the run-up to 2025.
Is AAVE better than Compound?
In real terms, AAVE and Compound are competing in the same space, in that they both provide crypto lending services. At the time of writing, it could be argued that AAVE has the edge over the older Compound, as it offers its services across more crypto assets and has more favourable borrowing terms.
Is now a good time to invest in AAVE?
AAVE has experienced some impressive price growth in 2021, with prices soaring to record highs in May. However, things have cooled slightly heading into June and the market is expected to start picking up again towards the end of the year, making now a good time to potentially invest in AAVE.
What are AAVE price predictions for 2030?
It’s no secret that long term crypto forecasts should be taken with a pinch of salt - the market simply moves too fast for them to be accurate. However, if AAVE price predictions for 2030 are anything to go by, we can expect big things from the DeFi project, with Coin Price Forecast expecting it to reach $2,464 by the end of the decade.