Aave: a DeFi for Unsecured Loans and Lines of Credit on Ethereum

[AlejandroZD 16]

Aave is a kind of online bank. Not in all its expression of the word, of course. But rather in the field of being able to access loans in cryptocurrencies (specifically in ERC20 and ETH tokens) under a decentralized protocol. With the possibility of being the lender and generating interest. All this on a platform that works through the smart contracts of the Ethereum network.

 

To know about Aave, you have to know its history and trajectory. This platform was originally born with the name of ETHLend, with the same concept as today: Decentralized Finance platform (DeFi) for loans, that is, under the P2P concept (person to person). Launched in 2017, ETHLend was one of the precursors of the DeFi category in the area of credits with crypto assets, even offering the possibility of requesting and guaranteeing loans directly with Bitcoin. A rather peculiar feature, since we are talking about a platform that works under the Ethereum network.

 

For September 2018, ETHLend evolves to Aave. This brought about a change in the way loans work. For example, liquidity wells were implemented, which are nothing more than a smart contract in which lenders could deposit their cryptocurrencies and other users request loans, with interest rates set based on supply and demand. This is one of the many innovations that Aave is currently offering to the market and that we will detail later.

 

The change from ETHLend to Aave is also partly due to the fierce competition that has been seen in the DeFi sector, with platforms such as Compound or Maker. What seems to have motivated Aave to offer services beyond that we only provide between users. And all this paid off, because by August 2020 Aave had greater blocked value (money given as collateral) than its closest competitors, being the leading DeFi platform in terms of liquidity of the moment.

[ascaniohenry 20]

Interesting your publication as a company goes from being a lending platform to a DEFI with greater liquidity of loans and even more in a market where there are many platform making space to gain that trust that has at this time Aave