Are you looking for a way to earn interest on your crypto savings or borrow against your assets? That’s what the Ethereum-based AAVE platform is all about.
In this article we’re going to do a brief overview of AAVE and what you can do with it. We’re also going to walk you through how to get started using it. Lastly, we’ll go over some of the behind the scenes technical details of the platform including the risks you’ll need to consider before signing up.
What is AAVE?
AAVE is an open-source DeFi platform that allows users to earn interest on deposits and borrow against them. There are no KYC checks, geographic restrictions or other limitations on who can join. Currently, the platform boasts of having over $3 billion in deposits.
One important difference with AAVE and other competitors is that this platform is non-custodial. In short, that means your deposits are always in your control. This is good because it means no single person or corporation can restrict your access to your deposits.
If the Swiss company behind AAVE were to disappear tomorrow, your funds would still be available. Non-custodial platforms do have some downsides though. If your funds are lost for any reason, AAVE can’t help you recover them. If there is a successful hack and funds are stolen, non-custodial platforms typically don’t have insurance. AAVE does offer a sort of pseudo insurance which we will get to later.
AAVE is built on Ethereum. That means it’s based on one of the most battle-proven crypto networks out there. However, the platform currently only supports a handful of ERC-20 tokens for earning interest and borrowing against.
That means popular non-Ethereum assets like Litecoin and XMR aren’t supported. AAVE supports most ERC-20 stablecoins (USDT, USDC, TUSD, DAI to name a few) as well as several other popular Ethereum-based tokens such as Basic Attention Token or BAT, 0x Coin or ZRX, and Maker or MKR. The platform…