Aave (or AAVE) is one of the most popular DeFi platforms in the world right now.
Many have been using Aave for passive income throughout the past few years, hitting its peak price and performance in 2021. Its popularity comes from being one unique DeFi platform. It revolutionized the simple idea of lending and borrowing and adapted it to cryptocurrency.
Would their idea again reflect an upward trend for 2022? To know more, let’s look at the Aave crypto background, its 2021 price movement, and the crypto forecast about its future performance.
What is AAVE Protocol?
Based on its website, Aave serves as a “decentralized non-custodial market” where users enter as borrowers or depositors.
Depositors can earn passive income by lending their Aave crypto and other cryptocurrencies to borrowers. Borrowing can be overcollateralized (perpetual borrowing) or undercollateralized (one-block liquidity or one-time borrowing), and the borrowers pay interests that return to the depositors after some time.
Aave is a favourable lending platform for two reasons:
- it is an open source, which means that no third party is needed
- it has an organized pooling of funds while staying decentralized.
When the lending and borrowing happens, the Aave protocol distributes the funds throughout its users. Smart contracts allocate the funds and can be audited and verified by third-party auditors for security purposes – maintaining the platform’s decentralization.
Aave yield farming takes the form of deposits. When one deposits on Aave, they use stablecoins to earn returns. Aave then allows these users to borrow money lower than the amount they deposited.
Some users opt to use Aave flash loans to borrow money without collateral. This option requires the users to be developers and return the amount in a one-block transaction. Other users may only be interested in the Aave protocol for adaptation to their apps. Because it is open-source, many business-minded users may use it to enrich their product line.
AAVE News and Updates
- As reported by Cointelegraph, a collaboration between Aave protocol and Pocket network, a decentralized Web3 infrastructure provider, might launch more than 44,000 nodes in many blockchains to increase the power of Dapp.
- On 7 July 2022, Aave announced a collateral-backed stablecoin proposal to AAVE DAO called GHO that is pegged to USD.
- AAVE has experienced a dramatic plunge with a 9% price rise from US$ 88.5 to US$ 96.4 in the past 24 hours on 19 July 2022.
AAVE Price Movement Throughout 2021
The Aave TVL (Total Value Locked), as of March 16, 2022, is priced at 11.6 billion USD.
In 2021, Aave showed its crypto potential with its bullish price movement. In May 2021, Aave reached its all-time high of 666.86 USD per token. The price stayed around 300 USD to 400 USD per token for the rest of the year.
Despite the extensive growth in 2021, the first quarter of the current year reflects a bearish movement of the price of Aave. Its peak price marked last January 2022 is at 276.74 USD and it has continued to fall since then.
Aave coin or token still has the potential to stay as one of the top cryptocurrencies to follow this year due to its continuous volatile movement in the crypto market.
As of March 2022, the Aave price is around 120 USD per token with a total market capitalization of 1.6 billion USD.
AAVE News Updates That Affect the increase in AAVE’s Price
- Token Swap: from LEND token to AAVE token
AAVE’s crypto growth was not without its challenges. One of their remarkable victories happened in 2020.
In its founding years (2017), Aave started with its native token called LEND. The buyers of this token hardly broke the 1 USD mark, reflecting the early struggles for Aave.
In 2020, the Aave users decided (through voting) for LEND to be migrated as an Aave token with a value of 100 LEND tokens per 1 Aave. By the summer of 2020, the spike in Aave’s TVL made it the fourth-largest DeFi platform.
Later that year, the Aave price broke 50 USD per token. Despite the usual fluctuations, its year-end price hit 88 USD per token.
Aave’s 2020 growth continued until May 2021, when it reached its all-time high of 666.86 USD per token.
- Surge in users using AAVE Protocol
Due to the price spike experienced by Aave entering 2021, newcomers rushed into Aave’s platform.
Aave is also open-source, which attracted more users to stay and keep using the platform for deposits and borrowing. It currently allows more than 30 cryptocurrencies to be borrowed and lent within the platform.
In February 2021, Billionaire Mike Novogratz stated that five cryptocurrencies, including Aave, have the potential to surpass or “replace JPMorgan and the NYSE… in the next five years.”
In April 2021, Aave protocol adopted a scalable Ethereum sidechain, Polygon to its platform, continuing its growth momentum. This event also influenced Aave to grow.
- Community Activity and Safety Module
Because Aave allows its users to make the decisions for the development and goals of the platform, it was able to withstand its challenges.
Users govern the risks, incentives, and improvements for the good of the Aave protocol. For example, the protocol has been secured by a safety module that serves as protection in times of liquidity deficits.
The safety module contains locked-up Aave tokens with values different from the new Aave tokens. Users can then stake the locked-up Aave tokens and share protocol fees, leading to its higher demand. The protocol fees reduce Aave token supply to further drive demand, leading to a price increase for Aave tokens.
The Prediction of AAVE Prices in 2022 According to Experts
Despite the promising run of Aave in 2021, its price for 2022 is yet to break the 300 USD mark. So, is Aave a good investment?
Here are some Aave price predictions in 2022 that will help you make an investment decision:
First, Aave has plans to increase both users and scalability this year, with an impending release of its mobile wallet app.
Second, part of the reason for its struggle in 2022 is the launching of Aave Arc.
It is a permissioned DeFi liquidity pool for institutions – gearing away from the vision of Aave Defi, which is to maintain a “decentralized non-custodial market.” This provides institutions power to regular Defi space. Since this Aave news, the Aave token price has been exhibiting a downward trend with a few daily ups, but not price spikes.
Lastly, most price forecasts regarding Aave show a conservative growth, yet good for holding due to a potential spike in the future.
Most predictions fall at around 200 USD to 300 USD by the end of 2022. PricePrediction forecasts a lower range (160-190 USD) for 2022, while CoinPriceForecast predicts around 200 USD per token by the end of 2022.
Is It Too Late to Buy AAVE in 2022?
Aave (AAVE) remains to be one of the highest tokens based on TVL. Although not as fast-growing as its 2021 performance, its growth has established it as one of the good tokens to hold until it overcomes its current bearish trend.
How to Buy AAVE Token on Zipmex?
To purchase Aave tokens on Zipmex, install the Zipmex application and follow the procedure below.
- Register and verify your account through KYC.
- If you already have an account, make sure to deposit funds to the Trade Wallet to be able to buy crypto assets.
- Go to the Trade menu at the bottom of the application on your Zipmex account. Then select “Buy Assets.”
- Choose the trading pair. You can choose AAVE/USD AAVE/USCD or local currencies.
- Select the transaction method you want. For transactions using real-time prices, can choose “Market Order”. For the transaction method at the price you set yourself, choose “Limit Order”.
- Enter the nominal price or the amount of the asset you want to buy or sell. Don’t forget to check whether all information, such as nominal and transaction methods, is correct.
- Click “Confirm.” Zipmex will process the buying of Aave tokens immediately. The results of the transaction will automatically go to your Trade Wallet.
Now that you’ve learned everything you need to know about AAVE price prediction, buy AAVE on Zipmex Exchange now and don’t miss out!
Disclaimer: The information provided in this article is not intended to provide investment or financial advice. Investment decisions should be based on the individual’s financial needs, objectives, and risk profile. We encourage readers to understand the assets and risks before making any investment entirely.
