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The Future Of Aave: What It Is And Why It Matters

Written by: Mustafa Mulla

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Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.

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Feb 7, 2022

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One of the questions people ask about Aave and other Defi cryptos is their future – where are they going? If you are part of the digital financial world, you might be accustomed to thinking about currency in terms of years or decades.

Over the last four years, Aave has continued to gain attention. But what exactly is it, and how does it work? Are there any advantages to using this virtual financial system?

This article will provide a breakdown of the basic things you need to know about this digital token. It also includes an Aave price forecast for 2022

What is AAVE?

Aave is a decentralized finance protocol that was created according to the principles of Ethereum. It was designed to act as a marketplace where users can share, lend and borrow funds without paying actual interest rates.

The system focuses on social proofing, making transactions between buyers, sellers, lenders; and borrowers as smooth as possible.

It does this by enforcing policies that ensure transparency among all parties involved. Aave transactions are effected on an open ledger, allowing everyone to see everything about them.

This Defi protocol is available globally, and it allows lending from 17 different crypto coins, including Ethereum and BAT. Consumers in countries with distressed economies and failing national currencies can trust it as a stable alternative.

However, due to technological challenges, individuals often choose to use traditional financial systems instead.

The History of Aave

Aave was a relatively unknown concept until 2017, when a Finnish programmer and entrepreneur called Stani Kulechov developed it.

Stani started Aave as a decentralized peer-to-peer lending platform that focuses mainly on cryptocurrency, blockchain; and Fintech.

Originally, Aave was known as ETHLend. It was launched on the Ethereum blockchain and generated $16.2 million in an initial coin offering (ICO). This prompted the need to revolutionize lending and to enable borrowing through the building of a system that gives everyone equal access to finance.

In 2018, ETHLend was renamed Aave, which means ghost in Finnish. The team behind the lending platform chose London as their headquarters, probably due to its large FinTech community.

At the beginning of January 2020, Aave was officially launched on the Ethereum mainnet. To the surprise of many, by August, it had risen to become the second Defi protocol to reach $1 billion.

What are the advantages of Aave?

The uniqueness of Aave has made it rise to become one of the most extensive liquidity protocols in a very short time. Some advantages of using this platform include:

  • Reliable interest rates for several crypto assets
  • More lending and borrowing features compared to traditional systems
  • A huge lending pool
  • Instant lending and borrowing
  • Fewer errors, or none at all
  • Support for users who trade high volumes of funds

The Future of Aave

Experts have different opinions on the future of Aave. While some think that the digital currency might outperform other cryptos, others are pretty skeptical. Nevertheless, you should note that expert predictions do not affect the price of Aave in any way.

Wallet Investor predicts that the Aave coin will increase in value over a long time. They forecast that the price will rise to $4,590.330, giving you an additional return of $732.86 by 2026 if you invest in it now.

Last year, Trading Beast predicted that the price of AAVE could rise to a maximum of $650 by the end of 2021. They also projected that the value would shoot to $1,300 or more by the end of 2022. This is slightly closer to the Reddit Community’s forecast, which puts the value of Aave at $1,200 by the end of the same year.

By the end of 2025, GOV Capital projects that Aave will trade at around $4,748. Their prediction for 2021 was $1,340.

 Aave from 2022 to 2025

Experts expect Aave to surpass the expectations of investors who have recently found the platform interactive. This is what you could look forward to from 2022 to 2025:

2022

Expected partnerships and funding may see the price of Aave shoot to $950.

2023

Standard government policies and regulations might push the price of Aave to between $1,100 and $1,200.

2024

Due to the aggressiveness of the coin, investors might put it at the forefront of their investments. Because of this, the price of the coin could shoot to $1,500.

2025

More investments in cryptocurrency may lead to more transactions per second. This might push Aave up, to trade at about $1,750.

Summary

Despite the many speculations surrounding cryptocurrencies, investing in Aave is pretty safe. You should also expect a rise in the value of this coin, despite the recent drops. Take advantage of the dip and put some money into Aave today. After all, the biggest risk you can take right now is to do nothing.

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Mustafa Mulla

Mustafa has been writing about Blockchain and crypto since many years. He has previous trading experience and has been working in the Fintech industry since 2017.

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