TL;DR
With the increasing number of lending options available in crypto, is Aave still worth using? As one of the first lending protocols and True DeFi Innovators. It’s natural to wonder if Aave’s time has passed or if it’s still a great place to park some tokens and earn a respectable yield. As one of the key questions we’ll tackle in today’s discussion about Aave. There’s a lot more to lending protocols than meets the eye. With the most important factors being yield, transparency, and security. Let’s see how Aave stacks up in the current crypto landscape.
Redefining the look and feel of the protocol recently. You might be surprised to find that Aave has done away with its iconic ghost figure in place of a more sophisticated half-face. This was not the doing of Aave alone. But rather a community-driven effort to bring the protocol up to speed with the current market sentiment. Proposed via Aave governance and launched just a few months ago. The rebrand comes almost a year after the company behind Aave was renamed to Avara last November. So start getting used to it because this is the new look of Aave.
What is Aave?
Aave is a powerhouse of a protocol with almost $20 Billion in Liquidity captured Across half a dozen networks. As one of the DeFi-defining protocols of the blockchain revolution. Aave has taken full advantage of its position in the marketplace to offer a transparent marketplace for lenders and borrowers to converge for a mutually beneficial exchange.
To say that Aave has solidified itself at the front of the crypto space is a gross understatement. Having been around as long as it has. Aave is interwoven into the fabric of smart contract lending I’m a way that very few protocols have been able to achieve. Because when loan security lies in a project’s ability to capture value and hold it. Aave is constantly referred to as one of the best places to do this. No matter what newer high-yield options present themselves. As the majority of whales agree that it’s more important to secure your assets in a pool with billions and receive less yield, than in a pool of millions for a little extra. As always it’s a question of risk vs reward.
Something that makes Aave a great place to be is the control each community member has over the direction of the protocol. Offering a gasless voting mechanism for participants in governance. Voters do not need to migrate funds to any specific voting network. Instead, all governance token balances and delegations are stored on Ethereum and validated on the voting network using storage proofs. This means that it doesn’t matter what network you support, you’ll never have to transfer assets off that network to participate in Aave governance.
Aave’s simple design is what makes it such a desirable place to farm yields. As an open-source non-custodial liquidity pool. Users remain in control of their funds at all times when interacting with the Aave protocol. Simply deposit your preferred tokens into Aave and you’ll receive a corresponding amount of aTokens (e.g., aETH, aUSDT, aUSDC). These tokens represent the addresses’ shared value in the selected pool and start accruing interest automatically. The interest rate earned is based on the amount of liquidity in the pool vs the amount of loans issued against it, known as the utilization rate….
Jesse is a passionate seeker of truth who enjoys educating others about Bitcoin.
As a free thinker and 2nd amendment advocate, Jesse believes each individual has the right to monetary freedom.
“The swarm is headed towards us” -Satoshi Nakamoto
