TVL > 100K
What is Aave (AAVE)?
Aave (AAVE) is a system of lending pools where users can deposit funds that they would like to lend out to other users. These are then collected into a specific lending pool. Borrowers can then draw from one of the available pools when they take out a loan. These tokens have the possibility of being traded as the lender sees fit. In order to facilitate this activity, Aave issues two types of tokens, the aTokens which are issued to the lenders so they can collect interest on their deposits and the AAVE tokens which are the native token of Aave.
Who are the founders of Aave (AAVE)?
Aave is a company originally founded in 2017 by Stani Kulechov. The company is based in Switzerland, while Kulechov was trained in law in Helinki and started the project while he was actually still a student. The firm in question was originally named ETHLend, and managed to raise $16.2 million in an Initial Coin offering (ICO) which was held in 2017. This was a point in time where Aave managed to sell 1 billion units of its native cryptocurrency token, which keep in mind, at the time was known as LEND. An additional 300 million units of the cryptocurrency token were held for the team behind the project.
What makes Aave (AAVE) unique?
The main way through which Aave differentiates itself is through what is known as flash loans. These can be instantly issued as well as settled, and require no upfront collateral. To do this, they take advantage of a feature that all blockchains have, which is that transactions can only be finalized when a new block is accepted by the network. Now, adding each block takes time, which is 13 seconds on Etheruem, and as such, Aave flash loans take place within those 13 seconds. A borrower requests funds from Aave, but they need to pay back those funds as well as a 0.09% fee within the same block. If they do not do this, the transaction gets canceled, and no funds are ever borrowed.