Cryptocurrencies today have changed the world of digital money. Most of them use a system based on blockchain technology - this is a publicly available "transaction ledger" that is maintained and updated by individuals or systems around the world that mine cryptocurrencies. Such transactions are publicly available but anonymous. In this network, transparent and anonymous transactions take place without intermediaries. This means that these transactions are hardly tracked or covered.
How do cryptocurrencies work? Compared to classic national currencies, they work in exactly the opposite way. Currencies such as euros or dollars are centralized and the amount in circulation is determined by the central bank. Thus, their number can increase or decrease. With the growth of the number of classic currencies in circulation, their depreciation occurs, that is, inflation.
The number of cryptocurrencies is specified in advance and they are safer in terms of the stability of their value, and their value is deflationary (growing).
Today you can mine cryptocurrency or buy it in exchange for another, classic currency. One of the advantages of introducing a digital currency is that if many people are tied to it, the value of the most blocked cryptocurrency token can skyrocket due to its limited supply. The initiative benefits both the blockchain and the user.
Over the years, the cryptocurrency lending division has been steadily growing, that is, making a profit through lending digital currencies. The topic of today's review is investing in the Aave in Hong Kong cryptocurrency.
What is Aave (AAVE)? Brief history
Aave is a well-known decentralization platform that allows users to lend and borrow a range of crypto assets. Aave excels at choosing cryptocurrencies that users can borrow and that lenders can earn passive income from the funds they lend to borrowers. Aave was founded in 2017 by developer Stani Kulchov, who explored Ethereum's potential to transform the traditional financial system.
Aave was originally introduced as ETHLend with its own LEND token. Stani Kulchov pursued the idea of creating a platform that would bring together cryptocurrency lenders and borrowers and match loan requests with specific offers. However, unfavorable financial conditions in 2018 led to a reassessment of the ETHLend concept and forced Kulchov to adapt its project and rename it Aave.
ETHLend is re-released in Aave in 2020. The restart principle is an algorithmic feature of the Aave money market.
While ETHLend has matched borrowers with suitable lenders on an individual basis, Aave implements a liquidity pool system in which crypto assets are pooled to obtain loans and interest rates are determined algorithmically depending on the type of asset borrowed. Under the new system, when an asset is scarce, interest rates are set higher to induce lenders to deposit more - and vice versa, when there is a lot of assets, interest rates are set lower to induce borrowers to borrow.
Aave makes it easy to get loans in various cryptocurrencies, but under the pooling system, borrowers are required to deposit an amount of collateral in excess of the amount they are borrowing.
How Aave works
Lenders place their funds in so-called credit pools and receive interest in the form of interest. The Aave Protocol offers two types of interest rates for borrowers and lenders:
- A variable interest rate that is calculated algorithmically based on supply and demand for assets stored in a pool.
- Fixed interest rate, which is the 30-day average of an individual crypto asset.
Users can switch between these tariffs at any time, but then they will have to pay a small fee for ETH gas. In order for the borrower to borrow certain funds, he must provide collateral.
The Aave Protocol also offers the unique opportunity to apply for a Flash Loan that does not require collateral. The loan cryptocurrency must then be repaid during the creation of a new Etherea block, which takes about 15 seconds. If the loan is not repaid within the specified period, the entire transaction will be canceled. For each term loan, a commission of 0.3% is charged. From a practical point of view, such loans may be of interest to arbitrators or to refinance other loans.
How Aave price is determined
Each cryptocurrency has its own price development, and by analyzing it, you can get an overview of Aave's history and predict its future. Aave's price is influenced by a number of different factors with varying degrees of significance. Some factors are unique to a particular coin, while others affect the entire crypto sector.
The strength and events in the global economy can affect the cryptocurrency market as a whole - this is how the price of almost all cryptocurrencies fell in 2020 due to the pandemic.
Aave's real-time value is determined by the balance between buyers and sellers in the stock market. When more people buy the coin than they sell, the price goes up, and when more people sell than buy, the price goes down.
The market value of Aave is equal to the price of the coin multiplied by the number of coins in circulation. Since for most cryptocurrencies, changes in assets in circulation usually occur rather gradually, changes in the market value of Aave are correlated with price movements.
You can find out the price of an Aave for a specific day by looking at the price at which it is sold and bought in the stock market, or by looking at a cryptocurrency chart in real time. Many coins change their price moment by moment, so many people like to use charts to find good buying or selling opportunities.
What are the advantages of Aave
With the growing popularity of the Aave coin, the currency is also becoming more and more important on leading exchanges and popular on trading platforms. For investors looking to bet on the course or invest in Aave, this increases the chances of high returns.
Aave benefits at a glance:
- The popular Ethereum blockchain serves as the basis for the Aave protocol.
- Lending to cryptocurrency funds creates good potential for return.
- Availability of various cryptocurrencies on the network.
- Aave-Pool maintains constant capital reserves.
- Users always have access to the pool.
Where to buy Aave
Have you decided to buy Aave in Hong Kong? It won't be difficult! One of the options is buying through the exchange. Aave is available on almost all major cryptocurrency exchanges, including Binance, Huobi, Coinbase, FTX Trading, and more. To start investing in Aave, you need to open a cryptocurrency wallet on the exchange of your choice and choose the right moment to buy Aave and close positions as soon as the price rises to the level you want.
While stock exchanges generally offer a wider range of cryptocurrencies, brokers often have more different deposit options, lower fees, and better security. It is easier and more dynamic to buy Aave through a broker. When you use brokers and CFDs, you are not buying the cryptocurrency itself, you are only speculating on price movements. There are many brokers today with easy-to-use platforms and great customer service experience without any hassle.
If you choose the right method, you may be pleasantly surprised at how easy it is to buy Aave!
How to start investing in Aave (AAVE) in Hong Kong?
You can invest in Aave in Hong Kong in two different ways: either by buying the cryptocurrency itself in the hope of reselling it at a profit, or speculating on its value without even owning the currency. This is how CFDs work.
With CFDs, you can trade contracts based on prices in the underlying market. CFDs are leveraged products, which means you can still access much larger positions with a small initial deposit. This can increase your bottom line.
Stop Loss and Take Profit are types of protective orders that are placed to automatically close a trade.
Stop loss will help you limit possible losses, take profit will help you to lock in profits when it reaches the desired level. The main function of such orders is to control trading in the absence of a trader. For example, if you cannot be at your computer all the time, such functions are useful and even irreplaceable. Indeed, in the absence of a trader, the market can turn sharply and go in the opposite direction.
How Safe Is Investing in Aave Online? Yes - if you are using a secure, licensed trading platform. Trading through the platform is very convenient. It will allow you to minimize the time spent on transactions and customize schedules based on the tasks that you set for yourself.
Should traders invest in Aave?
High inflation and zero interest rates are definitely not suitable for storing capital in fiat currencies, which is why many people have turned to cryptocurrencies as an alternative to safely storing money. Investing in Aave would be a great decision! Aave has demonstrated its resilience to negative external factors and its reputation is growing every day. User confidence is also growing. The use of Aave is gaining traction due to the many useful ways to implement it.
Given the high interest in both DeFi and Aave coins, it's safe to say that Aave is a good investment!
How to Buy Aave (AAVE) right now?
Investing in Aave in Hong Kong is easy today! It is enough to find a reliable broker with a reliable platform. The broker will allow you to quickly fund your deposit by credit card, Paypal or bank transfer. Aave's powerful and user-friendly trading platforms provide investors, from beginners to experts, with a comprehensive trading experience. You can follow Aave trends with advanced charting and analysis tools. Create your own watchlist and stay updated in real time! Try it today!
We wish you a profitable investment!