Background
Developer Stani Kulechov introduced AAVE in January 2017. He is the CEO of Aave and is a Finnish programmer. Stani is an entrepreneur with experience in the blockchain, fintech, and cryptocurrency sectors who received his degree from the University of Helsinki in 2018.
Ethland, which Stani launched in 2017, was renamed Aave in 2018. On November 29, 2017, the site held an ICO and succeeded in raising $17.86 million. Aave launched its whitepaper in January 2020, and version 2 of its protocol was announced in August 2020. On December 3, 2020, this V2 protocol’s main net went active.
What is Aave?
The Aave platform’s native coin is called AAVE. The platform’s coin is an ERC-20 token that serves primarily as a governance token. The platform’s Aave improvement proposals (AIPs), which are suggestions for platform improvements, are voted on using the token.
A further benefit of the token is that users who deposit AAVE as collateral can receive a reduction in transaction fees. In contrast, users who borrow the AAVE are not charged any fees. AAVE is a deflationary token, and the system burns AAVE with roughly 80% of the costs it receives. A portion of tokens can be burned by being transmitted to a wallet without a private key. As a result, the tokens are permanently lost. Token burning is done to decrease the supply of tokens and raise the value of the tokens.
AAVE Tokens: How Are They Made?
Depositing one’s AAVE tokens within the system is referred to as staking in Aave. Staking is carried out on the platform as a shortage event mitigation measure.
The protocol leverages 30% of the assets locked in staking during a shortfall to make up for the shortfall. The protocol compensates the liquidity providers as an incentive to contribute liquidity to the pool.
The protocol awards 550 new AAVE tokens per day, divided among the stakeholders according to the fraction of their platform contribution. You can stake AAVE by going to the staking portion of the Aave app and linking to the appropriate wallet.
How Many AAVE Tokens Are There?
The total supply of AAVE coins is 16 million.
How Does a Crypto Token Work?
Tokens work by attaching a unique identifier to a piece of digital information. When tokens are transferred, the recipient will be asked to provide evidence that they own the pass by providing its unique identifier.
Tokens may also use cryptography to protect their ownership and prevent tampering or counterfeit tokens that can be exchanged for other tokens of the same type, such as collectible coins. Non-fungible tokens (NFTs), on the other hand, are tokens that do not have a one-to-one correlation with additional tokens.
