Blockchain technology and digital assets have made their mark in every sector. It has disrupted several traditional systems for the better. One such DeFi platform that enables people to trade in digital assets and provides options to lend and borrow crypto is Aave (AAVE).
Aave has evolved to become one of the biggest DeFi projects in the market today. The platform has opened doors for people worldwide to access an algorithmic loan market where they can invest and earn.
It is a unique decentralized lending system that helped drive the DeFi sector to new heights. Therefore, investors and crypto enthusiasts are curious to know whether Aave could be the next millionaire-maker coin in the crypto world.
Aave: What Is It?
The Aave system is a next-generation protocol that allows users to lend and borrow crypto-assets and gain interest. This decentralized loan system allows digital asset holders to utilize all advantages of borrowing and lending with its native token AAVE.
The unique selling point of this crypto token is that it offers both fixed and variable interest rates and allows users to trade in the currency they choose. Fixed rates provide users some certainty about costs in the time of crypto market volatility. At the same time, variable interest is beneficial when the borrower thinks the price would fall in the near future.
Aave also enables decentralized exchanges to offer inexpensive and expeditious trades for their users. By integrating with Aave, these exchanges can run on steroids, making them trustworthy and secure.
Is Aave A Millionaire-Maker Investment?
Unlike most other cryptocurrencies, Aave is committed to gaining the trust of its investors by offering them an array of features. Soon after its launch, the Aave creators made their network open to everyone. It aimed to provide open access that is easy to use and beneficial for retail and company investors alike. This has made Aave one of the world’s most successful DeFi apps available so far.
Best of all, when one uses Aave, the entire system runs autonomously via smart contracts that are built on the Ethereum blockchain. Therefore, it efficiently eliminates the need for a middleman.
AAVE, the original utility token of the network, entered the market in November 2017 but under a different name. AAVE and its predecessor ETHLand were founded by Stani Kulechov.
The token had a significant rally in 2021, surging up to hit a record high of $666.86 on May 18. As of writing, the coin trades at above $134 and has a market cap of $1.8 billion.
With its unique approach to lending and borrowing in the crypto space, crypto enthusiasts have an optimistic view about Aave that it could be a millionaire-maker investment in the near future.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Factors That Drive Aave To Be A Millionaire-Maker Coin
Aave is indeed a unique project, and several factors back up the prediction that it could be a millionaire-maker coin for investors. Let us see some of them.
Solving The Issues Of Traditional Lending Services
One significant factor that drives Aave’s value in the market is that it tackles some of the most pressing challenges of conventional lending services. The purported goal of the project is to transform centralized financial services in a decentralized way to make them easier and more accessible.
In the traditional financial system, even if you lend your money, it is challenging to access profitable income. But by using Aave’s ecosystem, anybody can lend their crypto to other users in a trustless and permissionless manner. The interest gained by the loan will be directly paid to your network wallet, allowing you to reap sufficient profit.
This is the fuel behind Aave’s success to revolutionize Peer-to-Peer lending in the DeFi industry, which could even drive the token to be the next big millionaire-maker coin in the market.
Provide Complete Transparency
Unlike the traditional lending systems, users can gain complete transparency over the entire network’s lending protocols and activities. Instead of operating in a closed-door manner, with Aave, all activities with your funding are available on the blockchain for the whole community to view.
A Non-Custodial Protocol
Aave has a non-custodial protocol as it never holds your cryptocurrency directly. With non-custodial platforms, users can retain complete ownership of their assets. Additionally, there is also minimal risk of becoming a target for hackers as there are no wallets filled with user’s funds to hack.
Multiple Options Of Lending Pools
There is an excellent selection of lending pools available for Aave users. Currently, the network supports 17 different assets: Dai stablecoin (DAI), USD coin (USDC), True USD (TUSD), Tether (USDT), Synthetix USD (sUSD), Binance USD (BUSD), Ethereum (ETH), ETHlend (LEND), Basic Attention Token (BAT), Kyber Network (KNC), Chainlink (LINK), Decentraland (MANA), Maker (MKR), Augur (REP), Synthetix Network (SNX), Wrapped Bitcoin (wBTC) and 0x (ZRX).
Leverages The Power Of Oracles
An interesting fact about Aave is that it leverages the power of Chainlink (LINK) (which deploys oracle networks) to determine the real-time value of collateralized assets. The platform’s decentralized approach to oracles helps Aave to ensure that these sensors always remain accurate.
Lending and Borrowing in Aave
Aave, an open-source, non-custodial platform, allows its users to participate as depositors and borrowers. To transact, lenders have to deposit their funds into liquidity pools, and further borrowers can easily borrow from such liquidity pools.
Using the protocol, depositors can earn a passive income. At the same time, borrowers can seamlessly borrow their preferred amount in an overcollateralized or undercollateralized manner.
Interest Rate Switching
One of the unique features that Aave’s upgraded protocol offers is interest rate switching. Based on demand and supply, Aave algorithmically adjusts interest rates. That is, it reduces the available liquidity and interest rates whenever the borrowing demand increases. This will eventually help depositors generate more income.
In order to ensure that users can avail the best rate for the loan, the DeFi protocol allows them to switch between stable and variable interests in a hassle-free manner.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Could Aave Be A Millionaire-Maker Coin?
Thanks to the developers, who have envisioned a comprehensive plan, the future is bright for this cryptocurrency. The Aave Protocol V1 launched at the beginning of 2020, unlocking the value in DeFi and making it more user-friendly.
Soon after, with the launch of the Aave V2 upgrade, the platform opened a plethora of benefits for its users, like an undercollateralized loan option in the space, Flash Loans, interest rate switching, etc.
Aave is, therefore, one of the most exciting and profitable projects in the DeFi industry. With an array of innovations planned for the future, the market curve has all positive indications for the token, which could make it a millionaire-maker coin in the market.
Additionally, it stands out from its competitors like Compound with its variety of tokens on sale and lending pool options. Also, the AAVE token allows holders to influence changes in the Aave protocol to make it more efficient and user-centered.
Read Also: 17 Reasons Why You Should Invest in AAVE Today
The Bottomline
Aave, one of the best DeFi projects, has successfully eliminated the complexities of the decentralized ecosystem and aims to make it more user-friendly, simple, and efficient. With its unique features, this decentralized money market has paved the way for a more profitable and accessible financial system for users.
Considering all these significant factors and its optimistic rally in 2021, we can say that Aave could be the next millionaire-maker coin in the crypto space. It will also eventually become the favourite DeFi project for crypto enthusiasts.