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Aave (AAVE): Surged to the All-Time High

  • AAVE token surged against all odds to hit an all-time high this week before the current drop.
  • An increase in its total liquidity to over $20 billion and its decision to adopt Polygon are key reasons for this surge.
  • As the market tanks due to several factors, AAVE, CELO, Kusama, and a few others are heading for a surprise bullish run.
  • The effect of the big names in the market (Bitcoin, Ethereum, etc) going down is usually a bad signal for investors as they often generalize a bearish run.

The past week has been bad for the prices of digital assets due to several reasons. This bad news for the top coins didn’t affect the likes of AAVE and CELO. AAVE amidst all the drama in the market hit an all-time high of $661 on Monday gaining a record 700% this year alone.

The coin dropped down by 42% since then, reaching the low of $383 yesterday. The coin has recovered by nearly 20% since then and trades at $458 at the time of publishing.

AAVE

AAVE is a DeFi lending and borrowing protocol that lets its users earn through providing liquidity to pools. It is the second-largest DeFi lending platform. Launched in 2017 as Ethland, the platform has grown and lived up to its expectations with a maximum supply of 16,000,000 Aave tokens and 12,752,788 currently in circulation.

AAVE is a popular token and can be bought from top exchanges like Binance, OKEx, FTX, CoinTiger, etc. The rebranding of the platform occurred in 2018 with its name changing from Ethland to AAVE which translates to Ghost in Finnish.

The operation of AAVE is very simple as lenders earn money by depositing their cryptocurrencies and digital assets into liquidity pools and earn commission on transactions. It is a good way for users to earn a passive income and yield farmers love the platform.

As it is a two-way thing, borrowers take the deposited cryptocurrency to take flash loans. AAVE is built on the Ethereum Blockchain and it is currently making the transition from Proof-of-Work to Proof-of-Stake.

On the Flipside

  • The current price surge of AAVE comes at a time when the entire DeFi ecosystem is enjoying a major boom
  • As lucrative as the DeFi lending and borrowing platform tokens are, a generally bearish market would slow its growth.
  • AAVE may not hit the $700 target as expected by bullish investors in the short run. It may however hit $700 towards the end of the year.

Recent Developments and the Future: A Push Against All Odds

Recent developments have led to the surge which Aave has experienced in the past few days. Amidst the top coins struggling with Bitcoin falling to a little about $42000 and Ethereum also falling to $3600, the consistent surge of Aave is surprising to many.

Ripple is the biggest gainer in the top 10 rising a little more than 8%. The reason for the rise in the value of the token is the increase in its total liquidity to over $20 billion. Furthermore, by adapting Polygon the network activity has increased since April. Other assets like CELO, Synthetix, and Kusama have also been on the rise this week.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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    Author

    Milko Trajcevski has been in the crypto world for years, and as such has gathered both a skill for writing as well as a native prowess when it comes to understanding everything that occurs within that world. Through skilled writing and determination, he covers articles about cryptocurrency, tokens, blockchain, crypto-asset regulations, crypto wallets, exchanges, liquidity, DApps, forks, mining, security, and blockchain technologies. He is a professional with a track record of proven expertise within the crypto space.