Boo! Don’t be afraid — today, we’re learning all about a friendly ghost known as Aave.
Aave has been attracting plenty of attention lately, and plenty of capital too. Given that the protocol first appeared on the scene in early 2020, it’s not exactly a new arrival, but with the platforms TVL continuing to skyrocket, it’s time to take a closer look at the protocol.
So, what is Aave, why is it garnering so much buzz, and how do you get in the spirit of things and hop on board? Let’s find out.
What Is Aave? ❓
Simply put, Aave is a decentralized loan facilitator.
More specifically, it’s a non-custodial liquidity market protocol designed to allow users to participate as either depositors or borrowers. As their name implies, depositors deposit liquidity to the market, earning rewards for their trouble, while borrowers, well, borrow.
What sets Aave apart from most other protocols, however, is that borrowers can not only follow the traditional route of overcollateralized loans but also engage in unsecured borrowing. To do so, borrowers who already have a lot of collateral but don’t want to borrow against it can instead “delegate” their credit line to a trusted third party.
Aave V1 made its debut in January of 2020. When it was first unveiled flash loans, perpetual loans, and rate switching made big headlines. Then, less than a year, V2 arrived, bringing with it several new features, including upgraded flash loans, repayment with collateral, flash liquidations, and much more.
More additions seem to be on their way to Aave as well. Late last week, founder Stani Kulechov took to Twitter to announce that NFT as collateral would be coming to the protocol.
TVL go brrr 📈
When Aave V1 debuted, unsecured borrowing and flash loans made huge waves through the crypto space, waves that are still reverberating today. But the protocol and those behind it haven’t rested on their laurels.
In recent weeks, Aave’s also been in the news for the growing amount of money locked up in the protocol, buoyed in large part by its deployment on Polygon. In early June, Aave’s total value lock (TVL) skyrocketed, soaring to more than $20 billion, making it the largest decentralized protocol by TVL.
Aave: How to get involved 👻
Want to hop on the bandwagon and get involved with this increasingly popular protocol? If so, you can visit the Aave website to learn more, read their FAQ, and access their desktop app. You can also follow Aave on Medium or Twitter.