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Difference between revisions of "Aave"
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[[File:Aave.png|thumb|Aave]] | [[File:Aave.png|thumb|Aave]] | ||
Aave is a decentralized protocol where users can borrow tokens by depositing more collateral than what is being borrowed<ref>https://docs.aave.com/portal/</ref>. It was first known as ETHLend when it launched with an ICO in 2017. | '''Aave''' is a [[decentralized]] protocol where users can borrow tokens by depositing more collateral than what is being borrowed<ref>https://docs.aave.com/portal/</ref>. It was first known as ETHLend when it launched with an ICO in 2017. | ||
== History == | == History == | ||
AAVE, then known as ETHLend, launched in an ICO in November 2017 with the tagline: "Democratizing Lending with Ethereum Network"<ref>https://icobench.com/ico/ethlend</ref> raising a total of $17m. | AAVE, then known as ETHLend, launched in an [[ICO]] in November 2017 with the tagline: "Democratizing Lending with Ethereum Network"<ref>https://icobench.com/ico/ethlend</ref> raising a total of $17m. | ||
== Governance == | == Governance == | ||
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== Staking == | == Staking == | ||
Aave is secured by a Safety Module (SM), a staking mechanism for AAVE tokens to act as insurance against Shortfall Events (events caused when borrowed coins > collateral coins, which cause defaults). Stakers earn AAVE as Safety Incentives (SI) along with a percentage of protocol fees<ref>https://docs.aave.com/aavenomics/governance</ref>. | Aave is secured by a Safety Module (SM), a [[staking]] mechanism for AAVE tokens to act as insurance against Shortfall Events (events caused when borrowed coins > collateral coins, which cause defaults). Stakers earn AAVE as Safety Incentives (SI) along with a percentage of protocol fees<ref>https://docs.aave.com/aavenomics/governance</ref>. | ||
== AAVE V1 == | == AAVE V1 == | ||
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== AAVE V3 == | == AAVE V3 == | ||
V3 | V3 focuses on two things: risk awareness/mitigation, and capital efficiency. | ||
As a result, V3 introduces “isolated markets” – this allows Aave governance to list assets as collateral faster, but only as a single source of collateral, and not as a bundle. Additionally, isolated markets will have supply caps controlled by the DAO governance and as that asset matures they can increase the ceilings until eventually turning off the isolation model or the particular asset. So it kind of allows asset scalability | As a result, V3 introduces “isolated markets” – this allows Aave governance to list assets as collateral faster, but only as a single source of collateral, and not as a bundle. Additionally, isolated markets will have supply caps controlled by the [[DAO]] governance and as that asset matures they can increase the ceilings until eventually turning off the isolation model or the particular asset. So it kind of allows asset scalability | ||
V3 will also include “high efficiency mode.” This feature will allow users to leverage extremely high loan-to-value ratios so long as they take loans in the same asset that they deposit as collateral – in some instances, even up to 98% LTV. The main idea here is that once we have different kinds of stablecoins – euro stablecoins, pound stablecoins – then you can essentially have FX trading on-chain <ref>https://www.coindesk.com/tech/2022/03/16/defi-platform-aave-lauches-v3-with-cross-chain-swaps-front-and-center/</ref> | V3 will also include “high efficiency mode.” This feature will allow users to leverage extremely high loan-to-value ratios so long as they take loans in the same asset that they deposit as collateral – in some instances, even up to 98% LTV. The main idea here is that once we have different kinds of stablecoins – euro stablecoins, pound stablecoins – then you can essentially have FX trading on-chain <ref>https://www.coindesk.com/tech/2022/03/16/defi-platform-aave-lauches-v3-with-cross-chain-swaps-front-and-center/</ref> | ||
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<references /> | <references /> | ||
[[Category:Protocols]] | [[Category:Protocols]] | ||
[[Category:Lending]] | |||