How to Buy Aave in 2022

Cryptoassets are a highly volatile unregulated investment product.

What is Aave?

Aave is an Ethereum based protocol that provides financial opportunities for cryptocurrency users. The protocol became popular as users started to engage with DeFi during the summer of 2020.

Aave is a decentralized finance protocol that allows users to interact with financial products without interacting with third parties. Aave allows users that have cryptocurrencies to borrow or lend crypto. Every interaction occurs with ERC-20 token standards.

The idea of the protocol was formed in 2017 and first pitched to investors through an initial coin offering or ICO. During the crowdfunding phase, Aave, which was previously titled ETHLend, sold a total of $16.2 million worth of their native token LEND – 1 billion total tokens. In 2018, the platform renamed itself AAVE while also transforming the protocol network approach.

At its core, Aave is a non-custodial liquidity protocol that took the blockchain industry by storm in 2020 after it revolutionized the notion of decentralized finance. Users can use Aave to borrow or lend ERC-20 compatible currencies through a lending pool. Unlike traditional finance, where banks request collateral for lending money, users deposit their cryptocurrencies as collateral.

Aave is a for-profit organization but is has implemented a decentralized autonomous organization governance model. Thus, token holders govern and guide the protocol by voting using AAVE tokens.

The innovation introduced by Aave is the liquidity pool. Users deposit their assets into liquidity pools and obtain yearly interest on their deposits. In turn, the protocol lends out tokens from the pool while paying interest. Thus, participants in the ecosystem are don’t have to interact with any other third party. Aave creates a peer-to-peer system enforced via Ethereum smart contracts.

One of Aave’s main features is flash loans, where users are not required to provide Liquidity. Instead, the protocol’s function only works if the Liquidity is returned in the same block. This has enabled more networks to use Aave’s open-source as a foundation for offering users with swapped Liquidity. It’s a form of DeFi related arbitrage trading where users can make instant trades within the block’s frame while profiting from price fluctuations.

The total value locked on Aave is $11.17 billion, while the network holds total Liquidity of $18 billion. While DeFi has shifted away from Ethereum due to high network fees, AAVE is still a top 3 network by TVL. Even though the interest paid on deposits is lower than other protocols, Aave guarantees risk-free crypto lending and staking.

Is AAVE a Good Investment?

To eliminate decision biases, insights into the protocols underlying function can indicate if you should buy AAVE now or wait until the market retraces even further. We believe AAVE could be a good investment opportunity because it transformed how users interact with financial products and offers an alternative product.

First mover advantage.

It’s not surprising that Aave is a top DeFi coin by TVL with a total liquidity capital of $18 billion. Aave has a first-mover advantage that conveys trust by providing low-risk passive income. Even though the yield provided to lenders on the platform is much lower, the protocol attracts larger investors, attracting more institutional capital as the DeFi sector matures.

DeFi adoption

DeFi is still in the initial development stages. However, the blockchain sector passed its initial hype phase, and the idea behind decentralized finance is starting to take shape as individuals continue to lose trust in traditional financial institutions. The next five years will lead to more DeFi adoption globally. As crypto becomes normalized, users will see the value in using DeFi for their financial needs, increasing regulation and adoption for institutions and possible governments.

First Uncollateralized Loans

Aave pioneered the DeFi space after creating the first uncollateralized loan option. As a result, traders in the space are offered more trading liquidity to expand their trades and possibly bank on some profit.

Upcoming upside potential

As the crypto market cooled down, retail traders have shifted towards risk-free assets. Even so, the price of AAVE is by more than 200% since its starting price. If retail mania kicks bank in, and users start to deploy cash to innovative projects like Aave or other DeFi protocols, AAVE’s price could pass its previous all-time high of $666.86, and that’s a 600% profit margin.

Passive Income

Aave offers traders the possibility of generating passive income. Users can borrow through Aave and allocate their new capital to other protocols, yielding additional profits. Aave is a gateway to the DeFi space because it provides additional capital for yield farms. In addition, AAVE token holders can stake their assets and increase their holdings without risking any of their portfolios.

Low Ethereum Fees

DeFi was pioneered on the Ethereum network, leading to the start of the DeFi summer in 2020 when AAVE or CURVE spiked the interest for a more transparent financial model. DeFi migrated to other Layer 1s or Layer 2s protocols due to high network fees. With Ethereum 2.0 expected to merge by 2022, Aave will soon lure new users, even though now, with the current high gas fees, Aave still offers profitable lending and borrowing.

Aave Price

The price of AAVE has not decoupled from Bitcoin. Instead, Bitcoin is still trading sideways, directly influencing the possibility for altcoins such as AAVE to push towards the upside. At the time of writing, AAVE was trading at $121.86, down by roughly 80% since its all-time high in May 2021, when the price of AAVE reached $631 as retail mania ripped through the market.

AAVE is up by 1.8% in the past 24 hours; however, the price is still down by 13.8% in the past 14 days. The relative Relative Strength Index (RSI) is yet to pass by bearish sentiment and is still below the 40-mark. Still, investors are considering the current price range as a bottom, and users should buy AAVE coin in this range. Data shows that Aave has registered a record number of new users in the past nine months, which mirrors an increase in platform deposits.

Aave price prediction

The narrative shift prompted investors to exit most of their DeFi position and jump on the NFT and metaverse trend. If we looked at the token’s previous price action when interest in DeFi was high, we could place our Aave price prediction above its previous all-time high of $630.

Aave’s current market cap is in the range of $1.6 billion with a fully diluted value of $1.9 billion, showing a lot of upside potential in the long term. Experts predict the price of AAVE could reach $5274.25 by 2030 and smash its previous all-time high as crypto will enter a new adoption phase.

In the short term, we can expect AAVE to trade in the $198.52 range, especially if Bitcoin continues to move sideways.

Ways of Buying Aave

The benefit of crypto adoption is that it has decreased the complexities of purchasing crypto. So if you want to know how to buy AAVE crypto using traditional payment forms, when here are a few options that can get you started:

Buy Aave with PayPal.

PayPal is a millennial-friendly platform that allows users to instantly transfer funds between friends or securely pay for services/products. Now PayPal has enabled a function where platform users can get exposure to cryptocurrencies and use them to make payments. But if you’re looking to invest in crypto on PayPal, that’s not entirely possible because PayPal has limited options available. Instead, you can sign-up for an international broker like eToro, which allows PayPal deposits without any deposit fees. Users are then able to buy AAVE for as little as $10.

Buy Aave with credit card or debit card.

Everybody has a credit debit card. More people are relying on their cards to make payments. However, not every cryptocurrency exchange offers dual deposit options. If you want to invest in Aave using a credit card, you have to consider the credit card fees regular crypto exchanges charge for deposits. eToro is the ideal broker because the platform doesn’t charge additional fees while offering exposure to many cryptocurrencies, including AAVE.

Best Aave Wallet

Crypto wallets are essential parts of the crypto trading business because they ensure your assets are kept safe. You can find two different categories of crypto wallets. Hot wallets are software wallets that are always connected to the internet and present some form of risk when storing large amounts of AAVE. Cold wallets, on the other hand, are not connected to the internet. Data is stored on a USB and is often retrieved when connected to the internet.

Cryptocurrency exchanges have created a hot and cold wallet storage system allowing users to displace a small share to their active trading account while keeping most of their AAVE savings in cold storage.

If you are looking for a reliable and highly secured hot wallet, we recommend using the eToro Money Crypto Wallet. Not only does the wallet provide security key recovery features, but it’s also regulated by GSFC, which adds an additional layer of security to your investments.

Through the eToro Money Crypto Wallet, you can trade crypto directly on-chain. The platform offers over 500 trading pairs and supports over 120 different cryptocurrencies. Users can store the most popular blockchain network on the wallet. If you know where to buy AAVE now, you also know where to store it securely, even if you have an Android or iOS operating system.

Cryptoassets are a highly volatile unregulated investment product.

How to Buy Aave – Tutorial

If you are thinking about how to invest in Aave, then follow the steps below:

Step 1: Open eToro Account

Open the eToro website and select “Join Now” to open your account. On the new screen, fill in your full name username, set up a unique password nobody knows, add your mobile number and type your e-mail address. eToro also offers you the option to sign-up using your Facebook or Google account. When all the information has been currently filled in, click on “Create Account.”

Step 2: Verification Step

Unlike a cryptocurrency exchange, eToro is a regulated platform. Therefore, users have to complete a KYC process. First, have your driver’s license or passport ready. Then, click on “Verify,” upload your personal document and make sure all the information is clearly visible. You also need to upload a document that proves your utility bill or a bank statement.

Step 3: Deposit Funds

You need to deposit funds to start trading. Click on the button in the lower-left corner of the screen which says “Deposit.” Add the total amount you want to deposit in the first field with a minimum of $10. Next, select the payment method and fill in the details. Once all the information is completed, tap “Deposit Now” to fund your account.

Step 4: Search for AAVE

Drag the cursor to the top of the page and tap the search box. Type the name of the token AAVE and select trade to open the trading screen.

Step 5: Buy AAVE

Type the amount you want to invest for your purchase and click on “Open Trade” to finalize your action and purchase your tokens. You cannot buy more than you have deposited.

How to Sell AAVE

When you want to close your Aave position simply tap on the red cross symbol at the right side of your portfolio. To go a step further and withdraw your money from eToro, you can select “Withdraw” and choose your preferred withdrawal method. Then, the withdrawal process will be initiated, and for each withdrawal, you will have to pay a $5 fee.

Conclusion

The AAVE protocol is an industry favorite, and could be considered as a great long-term investment because it provides alternatives to centralized financial products on a trusted network.

If you decide to buy AAVE, we recommend using eToro. The platform offers a new and secure way of trading crypto through its CopyTrader function and social platform structure.

Cryptoassets are a highly volatile unregulated investment product.

Frequently Asked Questions on Aave