AAVE Token Research Report
Disclaimer: this report is not investment or financial advice, it simply aggregates some important information about AAVE so new token holders can understand the token a little better. Always DYOR (do your own research)
1. What is DeFi
Decentralized Finance (or simply DeFi) refers to an ecosystem of financial applications that are built on top of blockchain networks. Most notably the largest components of DeFi are in the lending & borrowing space (such as Aave, Compound finance), and DEX (decentralized exchanges such as Uniswap). Further, most of DeFi applications today are run on the Ethereum chain, but other chains such as the Binance Smart chain (BSC) are catching up fast.
To learn more about DeFi: https://academy.binance.com/en/articles/the-complete-beginners-guide-to-decentralized-finance-defi
2. What is AAVE
Aave is a decentralized lending and borrowing platform built on the Ethereum blockchain. Aave currently offers borrowing and lending for 22 different ERC-20 tokens including USDT, USDC, ETH, and LINK. Lenders can deposit any one of these ERC-20 tokens on Aave and earn interest on those funds. The interest lenders earn comes from the interest being paid by borrowers who are borrowing that ERC-20 token. At this time, Aave offers 4 Aave platform, Aave v1, Aave v2, Aave AMM and Aave Polygon, which add up to a total liqudity of roughly $20B.
Aave website: https://aave.com/
Aave metrics: https://aavewatch.vercel.app/
3. What is the AAVE token
The AAVE token is a governance token and allows staking return of 7% on Aave safety module staking. Note, staking carries the risk of maximum 30% slashing. As an AAVE token holder, you could vote to change various protocol and governance parameters.
Aave safety module staking: https://app.aave.com/staking
Aave goverance voting: https://app.aave.com/governance
Aave goverance proposal discussion: https://governance.aave.com/
4. AAVE fundamentals
At the time of this writing, Aave has roughly $12B TVL (total value locked) and 12,747,113 out of 16,000,000 tokens in circulation. Aave has a very active developing team with Stani being its founder and leader. Aave’s involvement in NFT is Aavegotchi.
Aave profile: https://www.coingecko.com/en/coins/aave
Learn more about TVL: https://academy.binance.com/en/articles/7-indicators-every-defi-investor-should-know
Two DeFi TVL reporting website:
https://defillama.com/home
https://defipulse.com/
Aave tokenomics: https://docs.aave.com/aavenomics/
Selected Aave team twitters:
https://twitter.com/StaniKulechov
https://twitter.com/AaveAave
https://twitter.com/The3D_
https://twitter.com/A_BertoG
https://twitter.com/SirSoth91
Aavegotchi: https://coinmarketcap.com/currencies/aavegotchi/
5. Latest AAVE news and catalysts
Coindesk: https://www.coindesk.com/market-wrap-defi-climbs-eth-btc-dump
Cointelegraph: https://cointelegraph.com/news/defi-lending-platform-aave-reveals-private-pool-for-institutions
6. Speculations (NOT INVESTING ADVICE, OPINIONS ONLY)
a. Technical Analysis: Aave seems to have found strong support at $300 level, it has been tested several times. Other support/resistence levels are $370, $440, $520 levels. Previous ATH was $581 (Feb 2021), current ATH is $621 (May 2021)
Tradingview: https://www.tradingview.com/symbols/AAVEUSDT/
b. Fundamental Analysis: Aave has rasied $24M in VC funding to begin with. Aave has one of the best tokenomics of DeFi governance tokens (with 80% tokens in circulation and an inflation rate of about 1.2% per year). Aave seems to have a few catalysts going on right now. One is that Aave has recently released staking reward with liquidity farming in May 2021, gaining more users with its attractive yield and features. Another is the institutional adoption of DeFi, Aave has hinted that it may work with institutional clients in a separate DeFi pool. Next is Bitwise registering the Aave trust with the SEC (with $92M raised), although an official announcement has yet to be made by Bitwise. Aave has also hinted the release of a yield generating NFT with Marshmallow, and a potential integration of DeFi with social media previously.
Aave funding profile: https://www.crunchbase.com/organization/ethlend
Aave tokenomics: https://coinmarketcap.com/currencies/aave/
Aave launches liquidity farming: https://cointelegraph.com/news/aave-v2-launches-liquidity-mining-program-targeting-stablecoin-borrowers
Aave institutional pool: https://cointelegraph.com/news/defi-lending-platform-aave-reveals-private-pool-for-institutions
Aave Trust Bitwise SEC filing: https://sec.report/Document/0001859131-21-000001/
Aave yield generating NFT tweet: https://twitter.com/AaveAave/status/1392510775927922698
Aave social media tweet: https://twitter.com/aaveaave/status/1383427500739420171?lang=en
7. Risks
Well, it is crypto, everything is so new and nobody really knows what’s going on. Also, the real value of governance tokens always come into question and they are said to be more difficult to value comparing to utility tokens.
Researcher: venturefounder
Have a question? Find me on Twitter: https://twitter.com/venturefounder
