In 2017, a group of blockchain enthusiasts led by Stani Kulechov came together to build a decentralized finance protocol on Ethereum that could facilitate lending and borrowing. In November 2017, the team launched the AAVE protocol, initially named ETHLend. The protocol enabled peer-to-peer lending and borrowing of ETH tokens without an intermediary using efficient smart contracts. Its native crypto at the time, LEND, was sold in an initial coin offering (ICO) and managed to raise about $17 million.
In September 2018, the protocol transitioned into the AAVE platform and the Aave governance token. The team rebuilt the protocol from the ground up to enable the lending and borrowing of multiple assets using a pool-based strategy. This strategy has proven to be more efficient over the years than the lender and borrower matchmaking employed by ETHLend.
Aave Crypto History
Aave Crypto was launched in 2020 after the 2018 and 2019 crypto bear markets began transitioning into a bull market. This gave Aave a quick run into the bull zone as the crypto surged astronomically in the months after its launch. The rapid price increase was further fueled by growing mainstream interest in decentralized finance (DeFi) and the complete rebranding of Aave.
At Aave’s launch, LEND holders were able to swap for Aave in a 100:1 ratio. Aave started trading below $50 in October 2020. However, in continuation of the 2020 bull run, Aave was able to increase quickly and end the year at around $80. This run continued into early 2021 when Aave surged to new consecutive all-time highs. As a result, Aave managed to climb to $661.69 on May 18, 2021, its current all-time high.
The price surge came amid a broader rally in cryptocurrencies and increasing usage of the Aave protocol. At its peak, Aave crypto had a market cap of over $10 billion, cementing its status as one of the most significant DeFi projects.
While Aave has seen significant gains, it is also a very volatile asset. This peak was short-lived, though, as Aave crashed down by over 72% in less than a month to as low as $187. The crypto continued to exhibit immense volatility for the rest of the year. By August 2021, Aave had returned to $444. Again, this was only for a while, and it ended the year at around $236.
Since 2021, Aave’s price has failed multiple times in its quest to climb above $200 again. An extended bear market in 2022 and 2023 saw the crypto trading between the upper and lower ends of $100 and $55, respectively.
Growth And Mainstream Adoption
The Aave protocol allows users to take out instantaneous loans of cryptocurrencies using other cryptocurrencies as collateral. Holders of Aave crypto can also earn passive income by depositing their Aave tokens as collateral for the protocols. Furthermore, Aave has undergone major upgrades to birth Aave V2 and Aave V3, which are two of the biggest lending protocols in terms of TVL, according to DeFiLlama. Users can deposit over a dozen crypto assets into Aave’s lending pools and earn interest from borrowers. On the other hand, borrowers can then use their crypto as collateral to take out loans. Borrowers can also take out a flash loan, which does not require any collateral as long as it can be repaid within the same transaction.
Over the past few years, the Aave protocol has experienced immense growth and mainstream adoption. AAVE is now the largest DeFi lending protocol and one of the most prominent platforms in decentralized finance. During its peak, the total value locked in the protocol grew to over $19.44 billion in October 2021.
Aave News Today
DeFi platforms like Aave are becoming more popular today, especially as the crypto industry is now penetrating into the world of traditional finance. NewsBTC is committed to reporting on the latest Aave price predictions from crypto experts and analysts. Furthermore, NewsBTC is dedicated to providing regular updates on new features and upgrades, as well as reporting new releases and announcements from the Aave team.
