Aave Price Today

The current real-time Aave price is $102.40 . AAVE price has plummeted by 3.45% in the last day and increased by 24.01% in the last seven days. It’s important to note that the current Aave market capitalization is $1,523,158,688. The maximum supply is coins, with a circulating supply of 14,874,731.82. AAVE is ranked #55 in terms of market cap.

Aave Explained

Aave (AAVE) is a decentralized finance (DeFi) project that facilitates the lending and borrowing of cryptocurrency. People can use the Aave platform to earn interest on their assets by entering them into the lending program. 

Aave doesn’t operate on a propriety blockchain. Instead, the project is built atop the Ethereum network and benefits from its decentralization, security, and reliability. As a decentralized platform, Aave operates without middlemen, using a series of smart contracts to pool and allocate funds as required without compromising user safety. 

Swiss entrepreneur and then law student Stani Kulechov created Aave in 2017. Originally named ETHLend, Aave raised $16.2 million through its Initial Coin Offering (ICO). 

The Inner Working of Aave

In contrast to lending protocols like Maker, which pair borrowers and lenders in a Peer-to-Peer (P2P) system, Aave pools funds and distributes them as needed. However, to ensure that Aave will not be left out of pocket due to malicious users, borrowers are required to lock collateral with a larger value than the sum of their borrowing in the Aave smart contract.

Users can deposit collateral in 30 cryptocurrencies to borrow 27 assets, including Ethereum, Chainlink, and USDT. When people supply AAVE, aTokens pegged 1:1 with the corresponding asset are minted. These aTokens collect and distribute yield attained from the lent asset. 

Being built using the Ethereum network’s underlying architecture, Aave utilizes the Proof-of-Stake (PoS) consensus mechanism for transaction validation. 

The Utility of Aave

Borrowers only represent one-half of the Aave ecosystem. Cryptocurrency investors can also use the platform to earn a yield on their holdings. Rates vary substantially from 0.01% to 4.47%, so only specific assets are worth lending. Most of Aave’s stablecoins offer a roughly 3.5% to 3.88% yield, enabling people to earn yield while minimizing volatility exposure. 

People can stake AAVE tokens in the Saftey Module to improve the network’s security and earn crypto rewards. Aave offers a yield of 4.69% on its native token. The protocol can also slash staked Aave by up to 30% to cover any shortfall, improving the protocol’s stability. 

Outside of its lending/borrowing uses, AAVE is the governance token of the entire protocol. Holders can vote on proposed changes to the project, with voting rights corresponding to the amount of AAVE they hold. Proposals must receive a majority yes vote to be approved. 

Aave Flash Loans

Aave has built a unique system that enables people to borrow funds instantly without posting collateral. The flash loan system works because transactions are only written to a blockchain after a new block is minted, which takes Ethereum 13 seconds. As such, flash loans occur over a 13-second period and get canceled if the borrower doesn’t repay their loan and a 0.09% fee within this time frame. 

Aave Price History

AAVE first became available via a 2017 presale in which tokens were sold for $1. However, the project held a public Initial Coin Offering (ICO) shortly afterward, selling AAVE for $1.84, or a 98.64% discount compared to today’s prices. 

In October 2020, ETHLend rebranded to Aave, and the token supply was reduced by 100:1, causing prices to explode and AAVE to trade for roughly $52.675. However, this was just the start for AAVE, with the asset surging to $559.12 by February 2021. Fueled by the bull run and DeFi boom, AAVE grew further over the next few months, hitting an all-time high of $666.86 in May.

After surging, AAVE was unable to maintain its valuation. The asset succumbed to pressure from profit takers, falling sharply to around $304 in September, $191.75 in November, and $116 by February 2022. As market sentiment flipped negative, AAVE demand was curtailed, leading the asset to drop to around $65.44 in June.

For over a year, AAVE slumped, struggling to break above $100. However, as the broader market began to recover, AAVE followed suit, rising from $83.28 in January 2024 to a high of $153.27 by March. AAVE has since fallen slightly, but a 22.58% gain over the past seven days has led the asset to trade for $102.40 today.