πŸ”₯ Aave forecast 2021: AAVE course analysis & future

Aave website

Aave represents the decentralized money market based on the Blockchain from Ethereum is operated. Here, users are given the opportunity to lend and borrow a variety of crypto assets. Aave is characterized above all by the variety of digital currencies in which users can then take out loans - and also by the fact that the lender can build up a passive income in this way.

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When ETHLend became Aave

Stani Kulechov founded Aave in 2017. Kulechov previously dealt with Ethereum and the potential behind it to be able to change the classic financial system. At the beginning, Aave was introduced as ETHLend with a native token called LEND; the first Initial Coin Offering (ICO for short) brought in 16,2 million US dollars.

Aave branding overview

Initially, Kulechov pursued the idea of ​​creating a platform through which the lender can meet the borrower and then crypto currencies to be able to lend or borrow. However, it was the very unfavorable conditions in 2018 that led to the ETHLend concept having to be reconsidered, so that Kulechov began to adapt the project and then renamed it Aave.  

In 2020, ETHLend was re-launched as Aave. The main feature of the restart was the algorithmic money market function. ETHLend matched the borrower with the appropriate lenders on a case-by-case basis; At Aave, the liquidity pool system is implemented so that the assets are pooled for loans and then the interest rates are also determined algorithmically depending on the type of asset that is being borrowed. The aim of this new system is to ensure that assets that are measured as scarce have higher interest rates to be paid - and vice versa. That means less interest on assets that are still available in sufficient numbers.

Aave ecosystem overview

Even if Aave makes it easier to take out loans in the form of a desired cryptocurrency, a security deposit must be deposited as part of the pool system, which is also greater than the amount that is to be borrowed. Do you want a loan in Bitcoin of 100 US dollars, then an amount of more than 100 US dollars must be paid in another cryptocurrency.

In order to take into account the volatility of the crypto market, the Aave protocol also works with an algorithm so that the borrower's collateral is automatically liquidated after the value falls below the fixed ratio. The loans in the network are managed via smart contracts - verification is carried out by independent auditors.

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The AAVE token

After ETHLend was renamed Aave, there was also the introduction of the Aave token. The token, which runs on the basis of the blockchain, offers a number of advantages: A prey who deposits Aave as security can look forward to a discount on the transaction fee; if Aave are borrowed, no fees will be charged. In addition, the Aave owner also receives governance rights for the network - depending on how many Aave are owned.

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The aToken

Aave aTokens overview

In the Aave protocol there is the function of passive income - this is based on the second type of token called aToken. If assets are deposited into the liquidity pool, aTokens are always issued by Aave at a ratio of 1 to 1. These depend on the stored crypto currency and are destroyed in the course of the repayment. Anyone who pays in DAI, for example, generates aDAI.

It should be noted that aToken are interest-bearing. That is, the lender receives interest when a loan is made from the pool in which the assets have been deposited. The interest accrues in real time and is then transferred directly to the wallet of the user.

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Flash loan

Aave Flash Loans Explained

In addition to offering credit support in various cryptocurrencies also offer the Flash Loan Service. Flash loans access the unused liquidity within the pool, so that the borrower is given the opportunity to take out unsecured loans. The loan is then repaid as part of the same transaction - the fee in this case is 0,09 percent.

With the flash loan, the borrowers should be given the opportunity to use short-term financial opportunities in the crypto markets and also to use price differences through rapid trading activities within the time, in order to then be able to include a block in the chain. If the loan is not repaid within the same block, the transaction is reversed and the funds are repaid.

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Change of interest rate

Aave Rate Switching Explained

Aave introduced a so-called rate switching service so that the volatility of the crypto market can be taken into account. A service that enables the borrower to fix the interest rates on the loans themselves - it is also possible for the borrower to opt for a variable interest rate.

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What application possibilities are offered?

Aave stakeholders

Here, a completely secure and decentralized ecosystem of lenders and borrowers has been designed so that users across the planet have the opportunity to receive passive interest income on assets that they themselves contribute to the liquidity pool. In addition to the DeFi approach, there is also an open source solution, so that the function is expanded by developing third-party applications in the Ethereum network is made possible. Aave is currently working with the following developers:

  • Balancer: Balancer is currently being worked on on Balancer V2 Asset Manager. An app designed to make it possible for unused assets in liquidity pools to receive interest. The manager may serve as a bridge here, which then ensures that transfers between the networks are facilitated.
  • Pixelcraft Studios: Here they are working on Aavegotchi. A game that then allows players to collect Tamagotchi-style NFTs - based on the Aave protocol.
  • Axie Infinity: Here, too, there is cooperation for the purpose of the game "Axie Infinity". By playing skillfully, it is possible that you can win Aave tokens.
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The price development until today (as of June 1, 2021)

The Aave token has been available on the crypto market since October 2020. If the token started at around 50 US dollars, it jumped towards 90 US dollars within eight weeks. In January 2021 you could jump over the 100 US dollar limit - in February the price was over 300 US dollars. The all-time high was reached on May 18: 661 US dollars.

Aave price chart CoinMarketCap

The crypto market is volatile and always good for surprises. Once you can be positively surprised, then again negatively. In other words, if you have made the decision to then want to invest in the crypto market, it is important that you only invest amounts that are freely available and that you are convinced that you have a reputable partner at your side who is in further Follow that enables smooth access to the crypto market.

The money that is freely available can be invested - but if the invested amount is less, it should not become a financial burden or even lead to financial difficulties. That means, no matter how promising one or the other forecast is, you should never take money in your hand that has already been earmarked for certain expenses - rental specifications, leasing installments, loan installments, upcoming car repairs.

Furthermore, it may also be important to find out in advance about the provider who is to provide access to the crypto market. In the course of a comparison of providers, you will probably find the name here eToro bump. This is one of the best-known and most popular providers on the market. Above all, the provider also scores because eToro is a Online Broker which makes speculating with the price possible, but is also a crypto exchange, so that you can also buy coins here and Store in eToro's internal wallet can.

eToro website

The provider also convinces with a fair fee structure, a very wide range of offers and, ultimately, the fact that it is regulated: eToro is checked by the Cyprus Securities and Exchange Commission - or CySEC for short -, Cyprus’s financial supervisory authority. In addition, eToro offers social or so-called copy trading. This function may be of particular help to beginners who have never invested or speculated. Social trading makes it possible to copy decisions such as strategies of certain traders and then participate in their successes. To be fair, it must be noted that the experienced trader can also fail. This means that social trading is by no means to be understood as a guarantee of profit.

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Step 1: Register with eToro

Create eToro account

If eToro fulfills the self-imposed requirements, you can open an account in order to then be able to use the service. It only takes a few minutes to sign up, as eToro does not require the initial verification. The verification process only begins with the first application for the payment of the credit.

In the course of registration, you can either access Google or Facebook, provided you have a corresponding account, in order to then access one of the two services Register or log in to eToro to be able to. But you can also fill out the form. eToro only requires a few personal details: first and last name or your email address. After entering the username and password, the service can be used after the first deposit.

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Step 2: Deposit with PayPal, credit card or instant transfer 

Deposit money on eToro account

eToro has opted for a variety of payment methods here. Here you can top up the account by bank transfer, but you can also use your credit card, eWallets or also PayPal. While there are some Online Broker that only offer one or two payment methods, you can choose from a wide variety at eToro.

Depending on the selected payment method, the money is then available immediately, i.e. within a few seconds, or after a few working days, usually after two working days. It's quick with the credit card or even then, when using PayPal. A little patience is required if you decide on the classic bank transfer.

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‍Step 3: Buy and Sell 

eToro markets overview

One can Buy coins of certain cryptocurrencies or speculate on the price. If you want to buy coins, you specify the number of coins and eToro then shows the amount to be paid - if you enter the amount, there is information about how many coins you get for it. This is followed by the transfer in eToro's internal wallet. But you can also speculate with the price. In this case, click on X2. You don't buy coins here, so you don't have to use a wallet.

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The forecast to 2025

As a very popular DeFi application, Aave may already be an integral part of many investment strategies. This is also because an immense increase in value has been observed here since the token has been available on the crypto market. So it may be understandable that more and more crypto fans are using the The prognosis and want to know if it is advisable to invest in Aave.

Aave forecast wallet investor

Walletinvestor evaluates the price on the basis of AI-supported analyzes. For Aave, the experts expect a very β€œexciting” and β€œpromising” investment that could well ensure high profits in the next few years. In 2021, the price could go in the direction of $ 840; thus the price would increase eightfold with a view to January 2021. The trend is to continue in 2022: The price of the token could rise to 1.500 US dollars here; According to the experts, it will be possible for the token to reach a value of 2025 US dollars by 3.200.

Aave forecast Digitalcoinprice

Digitalcoinprice is also convinced that the price will go up. However, they are a little more cautious. So the experts assume that in 2021 you will stay in the area of ​​450 US dollars, then march towards 530 US dollars in the coming year and find yourself again in the area of ​​the all-time high of May 2023 in 18. By 2025, the price should then go towards 950 US dollars.

Even if Digitalcoinprice is a bit more pessimistic, it would also be a clear profit if the price developed like this.

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Our conclusion: what's next for Aave?

Due to the fact that there are many forecasts, but in the end these do not guarantee a profit, caution is always advised. That is, who invested in cryptocurrencies, should always only invest freely available money in order not to have to experience any nasty surprises in the end if the price does not develop as desired.

We at Bitcoin-News.one find, however, that Aave definitely has potential and could well provide attractive profits if it entered the market early enough.

Do you want to trade cryptocurrencies with the best conditions?
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Thomas Cormik

Thomas Cormik started out with the sole focus on educating his readers about Bitcoin and its potential impact on traditional financial systems. Thomas prides itself on bringing quality content to the masses under the Bitcoin-News.one banner.

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