The Ultimate Guide to Trading Aave With eToro
Aave (AAVE) is the native crypto currency of the decentralized lending platform and non-custodial money market protocol of the same name. As an Ethereum token, users use the Aave protocol to partake as either borrowers or depositors.
Depositors in Aave brings liquidity to the market and in turn, they got to earn an extra passive income wherein borrowers pay for a variable interest rate in exchange for the chance to borrow cryptocurrencies.
Thinking of Trading AAVE with eToro?
If you're planning on investing or trading AAVE then it would be simpler to click the button below. This will take you to the eToro AAVE trading page where you can easily check the current price of AAVE and buy AAVE of any value you plan to invest.
Before trading AAVE on eToro, just simply open an account with them. Don't worry, the whole process will only take a few minutes.
YES, TRADE AAVE NOW!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
History of Aave
Stani Kulechov, the founder of the firm ETHlend that entered the blockchain and crypto market in 2017 developed the Aave DeFi protocol. To further utilize the network, Kulechov took out the protocol's technical obstacles so other users can make improvements on it. During a crowd sale following its launch in 2017, Aave collected more than $16 million.
Known as ETHlend since 2017, it became Aave in April 2019 after undergoing a redesign and rebranding.
Coined from the Finnish word "Aave" which means "ghost", Aave is a form of Decentralized Finance (DeFi) protocol designed on the Ethereum blockchain.
Formerly known as ETHlend, it was originally developed as some kind of a marketplace where lenders and borrowers can negotiate transactions and terms without having to deal with a third party.
Think of a message board but it’s all about available loans.
Then came its improved version, the Aave that came with additional features that revolutionized the DeFi market.
How Does Aave Work?
By cutting off third-party involvement in lending and borrowing cryptocurrencies, Aave allows users to transact in a decentralized and trustless way.
To put it directly, in Aave, users won't have to deal with AML (Anti-Money Laundering) documentation, or the Know Your Customer (KYC) provisions in traditional banking practices.
In simpler explanation, lenders using the Aave network must deposit their funds in what is called a "liquidity pool". This pool is where borrowers can borrow fund as much as they want. To borrow funds from the pool, users selects an amount of collateral higher than the withdrawn amount (based on the US$).
When the collateral drops below the required collateralization threshold, the Aave system will automatically place it for liquidation. Users can have the choice to buy these funds at a lower value. This method controls the liquidity pool to forever remain positive.
Aave has also laid out the concept of ‘liquidity pool reserve fund”. This is when each pool set aside a tiny percentage of the asset to function as reserves to combat occurrences of volatility in the network or protocol.
This process is made possible by Aave creating a method that relies on lending pools and collateralized loans to create a smooth process for its users.
Remember: Lenders can have the freedom to withdraw all their funds at all times.
When a user deposits on Aave, they automatically receive an aToken. Users receive the same amount of aToken as their deposited fund. The aTokens plays a vital role in the Aave network as they allow users to earn interests from their lending activities.
How Does Aave Crypto Work?
AAVE is the local token of the Aave lending network and protocol. AAVE has a total supply of 16 million tokens.
The main use of AAVE is for Aave protocol governance as it ensures a decentralized management of the platform. It empowers holders with a chance to make a decision on managing the platform, make improvements, and allocate funds.
Other than governance use, AAVE can also be staked within the Aave platform in exchange for staking rewards.
Is Investing on AAVE a Good Idea?
Remember, the cryptocurrency market is a volatile one. Meaning, prices of cryptos can go down but it can also experience extreme highs. Invest at your own risk.
Good thing with AAVE however, is it is seen as a pioneering DeFi force in the crypto and blockchain market. When compared with other DeFi protocols, the Aave network appears way ahead.
How to Buy AAVE?
The simplest way to buy AAVE is to sign up for an account with a cryptocurrency or trading broker that supports the direct BUY and SELL of AAVE. One such cryptocurrency and trading broker is eToro.
The eToro is a great place to start since it offers a straightforward interface that allows for a seamless trading by clicking of a few buttons.
How to Trade AAVE on eToro?
- On your eToro dashboard, click "Trade Markets".
- Select "Crypto".
- Scroll down to look for "AAVE".
- Click "Buy" and set the amount you want to invest.
- "Click "Open Trade".
Got your eyes on AAVE now?
If you are, you can just click the button below and this will take you to eToro's online trading platform for Aave. Take note that this is the live platform but if you would like to explore or use it, you will have to open an account by clicking the "Sign up" on that page.
YES, TAKE ME TO ETORO!
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.