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The world of decentralized finance is an exciting sector of the cryptocurrency sphere. Aave (AAVE) is a decentralized finance (DeFi) protocol aimed at using the power of blockchain technology to help users borrow and lend cryptocurrency in a much more efficient manner than traditional lending and borrowing. This is all thanks to Ethereum, the smart contract blockchain that powers the Aave protocol.
If you’re thinking about expanding your investments in the cryptocurrency space, Aave can be an excellent token to begin with. Our guide will help you learn how to buy Aave, how the token functions where you can store your tokens for the highest level of protection and more.
What is Aave?
Aave is a decentralized lending platform built on Ethereum’s network. It allows users to borrow, lend and earn interest on crypto assets, all without middlemen. Applications are built on Ethereum using smart contracts, which is simply code uploaded to the blockchain. This code has key features that aren’t seen in traditional computer science –– smart contracts are immutable, decentralized and autonomous. You can think of smart contracts like a vending machine; there’s no intermediary, and once the machine recognizes you’ve put money in, the program will execute a pre-programmed function. This means Aave users are not reliant on a trusted institution or person to manage their funds. They need only trust that its code will execute as written.
The platform uses smart contracts to manage lending markets for a variety of different cryptocurrencies. Each cryptocurrency has its own liquidity pool where users can deposit or withdraw from. Those who withdraw funds are taking out crypto loans, and those who deposit funds are lending out their digital assets. To ensure that loans are paid back 100% of the time, users must put up high collateral requirements to receive a loan. Further, borrowers can only borrow up to the value of the collateral they post. B
Borrowers receive funds in the form of a unique token referred to as an aToken, which is pegged to the value of another asset. This token is encoded so lenders receive interest on deposits. In the future, Aave could also implement additional features, such as instant loans and other forms of issuing credit and debt that take advantage of the unique design properties of blockchain technology.
Brief History of Aave
Aave is a decentralized finance protocol that allows users to borrow and lend cryptocurrency using a largely anonymous platform. Previously known as ETHLend, Aave was launched in November 2017.
In addition to securing the application, Aave tokens allow holders to have voting shares in future company matters in a similar manner that stockholders can vote on company matters based on how many shares of stock they own.
Steps to Buy Aave
- Open an Online Account.
The 1st step to buying Aave begins with opening an account with an exchange that supports Aave. A crypto exchange will provide you with a trading platform that you can use to buy and sell cryptocurrencies for a fee.
There are a wide range of cryptocurrency exchanges that support Aave, and the best broker for you will vary depending on where you live and the types of cryptocurrencies you want to invest in.
Not sure where you’d like to open an account? Consider a few of our favorite cryptocurrency exchanges that are available to U.S based investors. Some great options are Coinbase, eToro and SoFi.
- Buy a Wallet (Optional).
After you decide where you want to purchase Aave and you open your account, you can open a wallet to safely store your tokens. A cryptocurrency wallet provides you with a private set of keys that you can use to store your tokens off your exchange, which limits your liability if your account is hacked. There are 2 types of cryptocurrency wallets (hardware and software) and each comes with its own unique benefits and drawbacks.
As an ERC-20 token, you’ll have a number of options when it comes to storing your Aave. Consider our favorite hardware and software wallets below.
- Make Your Purchase.
When your wallet is set up and you’ve fully opened and funded your brokerage account, you can place an order to buy AAVE. Placing an order to buy crypto involves a few steps.
Step 1: Choose your order type. The type of order that you choose will determine when your order is filled and how much you pay for each coin. You can browse some of the most common order types here.
Step 2: Decide how much AAVE you want to purchase. Cryptocurrency prices are constantly changing. Take a look at the current market rate of Aave before you decide how many tokens you want to purchase.
Step 3: Place your order. Depending on the type of order you’re using, you might need to specify a maximum price that you’re willing to pay per token as well as the number of tokens you’d like to purchase.
Step 4: Wait for your broker to fill your order. After you’ve submitted your order, your broker will fill it according to your instructions. When the order is complete, you’ll see your tokens in your brokerage wallet. If your broker is unable to fill your order, they may cancel it at the end of the trading day or they may leave it open indefinitely depending on the broker.
Recommended Exchanges for AAVE
Dharma is a mobile application that makes interacting with decentralized applications on Ethereum’s network easier than ever before. You can fund your account with a debit card, unlike any other Ethereum Wallet. By seamlessly connecting your wallet to decentralized applications, you can start earning interest on your cryptocurrency within minutes. Sign up today to get access to trade over 70,000 altcoins.
- Those looking to immediately purchase crypto with fiat (USD)
- Those looking to purchase altcoins, memecoins, etc.
- Those looking to immediate price action to a long list of tokens
- Users can buy crypto directly from bank accounts
- Only takes 5-10 minutes to begin buying crypto from fiat
- No network fee trading on Polygon
- Does not support some major tokens (Bitcoin, Litecoin, etc)
SoFi’s mission is simple: to help reach clients like you reach their financial independence and realize their ambitions. SoFi knows that this independence comes from making decisions that help your money start to work for you in the long run. The brand helps individuals make these decisions through personal financial products such as personal loans, student loans and automated and active investing.
The brand additionally provides in-person experiences such as educational and networking events, personalized guidance from experienced financial planners and one-on-one advising with professional career coaches. SoFi’s services have been highlighted in outlets such as Forbes, Medium, and CNBC’s Make It.
- IPO Investing
- Mobile Investing
- U.S.-based customer service
- Highly-rated mobile app for iPhone and Android
- Only available in the U.S.
Gemini is a cryptocurrency exchange and custodian that offers investors access to over 100 coins and tokens. Founded in the US, Gemini is expanding globally, in particular into Europe and Asia. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.
Gemini is 1 of the only brokers with multiple platform options based on skill level. New investors will love the streamlined interface of Gemini’s mobile and web apps, while advanced investors might appreciate all the tools that come with ActiveTrader.
In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review.
- New investors looking for a simple mobile and web app
- Day traders looking to use technical analysis tools
- Users looking for a 1-stop-shop to buy, sell and store all of their cryptos
- Easy and quick signups — can get started in as little as a 5 minutes
- Multitude of platforms to accommodate traders of all skill levels
- Hot wallets include insurance to protect your from theft and hacking attempts
- Charges both a commission and a convenience fee for users buying and selling through the desktop or mobile app
Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs.
You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.
Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.
- New cryptocurrency traders
- Cryptocurrency traders interested in major pairs
- Cryptocurrency traders interested in a simple platform
- Simple platform is easy to operate
- Comprehensive mobile app mirrors desktop functionality
- Coinbase Earn feature rewards you with crypto for learning about available coins
- Higher fees than competitors
iTrustCapital is a self-directed IRA provider that gives you the opportunity to invest in cryptocurrencies, gold and silver through your retirement account. iTrustCapital focuses on providing investors with a straightforward and easy-to-understand platform, which can be a major asset if you’ve never bought or sold alternative investments in the past.
When you reach retirement age, iTrustCapital allows you to choose whether you’d like to take your disbursements in cash or in the assets you’ve invested in. Though the platform does offer a limited range of cryptocurrencies when compared to brokers like Coinbase, its simple structure and unique IRA offerings make iTrustCapital a great place to invest.
- Investors who want to add gold, silver or cryptocurrencies to their IRA
- Those who are interested in taking a long-term approach to cryptocurrency or metal investing
- Beginner cryptocurrency investors
- Straightforward platform allows you to buy and sell assets in a few minutes
- Orders clear within 5 minutes
- 24/7 order placements and portfolio monitoring services
- Both live chat and phone customer service service available
- Limited number of cryptocurrencies to buy and sell
- No mobile app currently available
Recommended Wallets for Aave Tokens
Best Hardware Wallet: SecuX V20
If you’re searching for the perfect blend of security and portability, the SecX V20 might be the right cryptocurrency wallet for you. The SecuX V20’s durability begins with its tamper-proof case, which provides you with peace of mind when you take your device with you on your travels.
The wallet features Bluetooth connectivity and a full-color touchscreen to view and manage your tokens without connecting to local, unsecured Wi-Fi. Best of all, the device supports over 1,000 individual cryptocurrencies — providing you with a single place to store all of your blockchain investments.
Best Software Wallet: MyEtherWallet
MyEtherWallet is the original cryptocurrency wallet used to store Ethereum — but the software has expanded to include all types of ERC-20 tokens as well. MyEtherWallet features a simple setup and mobile app, allowing most users to create their account and get started transferring their tokens in as little as a few minutes.
You can connect your mobile app to your desktop using a QR code. If your phone moves too far away from your computer, the wallet will automatically disconnect — meaning that you won’t need to worry about leaving your wallet connected if you’re on a public internet connection or device.
Aave is an ERC-20 token, which means that it runs using the network laid in place by Ethereum. If you’re looking for a way to diversify your investment while also buying into emerging decentralized finance technology, an investment in Ethereum might be right for you.
Trade or Sell Your Cryptocurrency
If your broker is able to fill your order, you’ll need to decide if you want to hold your Aave long-term or if you want to take advantage of short-term price movements. If you think that the price of Aave will rise in the future, you may want to store your tokens in your private wallet.
And if you believe that the price of Aave will fluctuate in the upcoming days or weeks, you might want to short or scalp your tokens to accumulate more Aave.
When you decide to take profits, you can convert your excess Aave to a stablecoin like Tether or USD Coin. Select brokers may also allow you to convert Aave directly back to fiat currency.
If you plan on executing multiple trades throughout the day, you’ll want to choose a crypto broker with lower fees and a responsive platform. Consider a few of our favorite choices below.
Current Crypto Prices
The cryptocurrency market is extremely volatile, often fluctuating by large amounts within a short period of time. You might notice the price of Aave changing drastically on a day-to-day basis. Some of the factors that can influence how the cryptocurrency market is moving include:
Laws and regulations. The cryptocurrency market is still largely unregulated. However, individual states and countries have instituted their own rules regarding the purchase and sale of cryptocurrencies. The introduction of tighter regulations or bans can cause the price of coins to plummet.
- Media, news and announcements. Like stock trading, cryptocurrency trading can be influenced by the announcement of major updates, new partnerships and network upgrades. Keeping your eyes on cryptocurrency news and major developments can help you predict how the market will move.
- Financial markets. When traditional markets crash or see a sudden drop in value, investors tend to move their assets into alternative forms of investments. While these alternative investments usually include things like real estate and precious metals, recent years have seen more investors putting their money into major cryptocurrencies when markets drop.
- Supply and demand. Unlike fiat currency, there is a limited number of most types of cryptocurrencies. The higher a demand for a particular coin is, the higher the price will go. When demand falls, the price of the coin or token will also drop because fewer buyers are available.
- Mining costs. Cryptocurrencies like Bitcoin must be created using a process called “mining.” Mining requires a specialized computing device called an “extractor,” which uses a large amount of power and gets more difficult as more coins are produced. As mining costs increase, you can expect the price you pay per token or coin to increase as well.
It is important to note that high risk isn’t inherently bad or good for an investor. Risk works both ways, meaning that each investment into crypto carries the risk of significant failure and benefit of significant success. As an investor, you must evaluate your own risk tolerance before venturing into a cryptocurrency investment and decide between a short-term strategy, long-term strategy or a combination of both.
Keeping your eyes on how the market is moving can help you decide when the best time to buy and sell your coins is. View a summary of today’s market movements using the table below.
Should Aave Be Your Next Investment?
Aave is among many exciting projects running using the Ethereum network’s decentralized application functionality. Decentralized application projects are currently being developed in a wide range of industries, including banking, gaming and file storage.
Learning more about the Ethereum network and diversifying your investments can help increase your success on the cryptocurrency market. Get started today with 1 of Benzinga’s recommended brokers.
Frequently Asked Questions
How can I make a withdrawal on Aave?
On the Aave dashboard, you go to deposit and select withdraw.
How can I borrow on Aave?
You go to the website, choose the token to borrow on and select the borrow option.