Aave Coin Meaning – Aave Crypto:
so what is other all about how is it able to go from zero to three billion dollars in total value locked in less than a year and what’s the use case for the other token you’ll find answers to these questions in this video before we begin if you want to learn more about decentralized finance and the technology behind it make sure you subscribe to my channel hit the bell icon and enable all notifications you can also consider joining us on patreon and learning even more about deity let’s start from the beginning the initial version of ava which is currently one of the most popular lending protocols in decentralized finance came into existence in 2017. before the rebranding that happened later in september 2018 the project was known as eath land etheland was started in finland by stani kulechev stani a law degree graduate discovered ethereum realized the power of smart contracts and decided to build a peer-to-peer landing protocol finland was clearly not a usual location for a new tech company with the majority of other crypto firms launching in venture capital rich places such as silicon valley new york london hong kong or singapore this also shows one of the most interesting properties of decentralized finance in contrast to traditional finance where a new fintech startup requires a lot of capital and staff just to comply with all the banking regulations a unified project can be launched by even a single person with not a lot of upfront capital needed the first version of ith land was deployed to the ethereum mainnet in early 2017 and started attracting interest in the ethereum community stani saw the potential of decentralized landing and decided to raise money via an initial coin offering at the end of 2017 to fund further development of eath land as we mentioned earlier funding a project outside of a typical venture capital location can be quite challenging however the ico model allows everyone in the world to participate eastland was able to raise 16.2 million dollars which was quite moderate considering the craziness of the 2017 ico mania the ico allowed for hiring more developers who were able to focus on making improvements to the protocol throughout 2018. this was all despite the native heath lands token land losing most of its value in the post-ico era the ethelens team soon realized that the peer-to-peer lending model of the protocol was becoming more and more problematic in the peer-to-peer model users interact with other users via smart contracts this can be quite inefficient especially if there is no one on the other side who wants to interact with us a lot of other projects such as uni swap or compound that came into existence at the end of 2018 started leveraging another model peer-to-contract the peer-to-contract model is based on a contract with pooled funds that can be instantly used by the users of the protocol this eliminates the wait time necessary to find a counterparty and makes the whole process of interacting with a decentralized protocol smoother this was also the time when the team behind eath land decided to change their model from peer-to-peer to peer to contract and rebrand from etheland to other the name ave comes from finnish where it means a ghost this is also where we can now see a friendly ghost in the other’s logo when it comes to the protocol itself other users can become depositors or borrowers depositors provide funds to borrowers in return for interest on their deposit borrowers are willing to pay interest on the amount they borrowed in exchange for having a lump sum of money available immediately users can for example supply a stable coin such as die and start generating interest according to the die supply interest rate this is determined by the ratio between supplied and borrowed die the supplied die can then be used by borrowers borrowers have to supply collateral for example eth to be able to borrow other tokens all the standard loans in ava are over collateralized which means that the value of supplied collateral is higher than the amount that can be borrowed this protects the protocol from being under-collateralized and not being able to repay depositors in this model depositors basically provide liquidity to the protocol this is also why ave is very often described as a decentralized liquidity market protocol on top of variable interest rates ave also offers stable borrow rates which is a distinctive feature not present in other popular lending defy protocols such as compound in other depositors who provide funds to a smart contract receive a tokens the value of a tokens is pegged to the value of the underlying token at a one-to-one ratio what is interesting is that the balance of a tokens represents their deposited amount plus the accrued interest and it keeps increasing according to the current borrow interest rate of the protocol also a tokens are just erc20 tokens this means you can basically send them to someone else and the balance of their a tokens will keep increasing in their wallet automatically which is pretty cool if you want to learn more about how exactly landing works in defy and why is it even needed in the first place check out our other video that covers this topic in depth another important concept popularized by ave is flash loans a flash loan is a feature that allows you to borrow any available amount of assets from a designated smart contract pool with no upfront collateral needed the caveat is that a flash loan has to be borrowed and repaid within the same blockchain transaction these constructs are useful building blocks in d5 as they can be used for things like arbitrage swapping collateral and self-liquidation fortunately enough we also made a separate video that explains the mechanics of flash loans and you can check it out here after a couple of years of work i ava launched on the ethereum maintenance at the beginning of 2020 and started building users interest and its total value locked in the protocol this quickly escalated in may 2020 when a period of defy super growth also called defy summer started before defy summer the total value locked in ave which is one of the key metrics when it comes to a landing protocol was at around 40 million dollars with launches of unit5 protocols and new yield farming opportunities ava’s tvl started rising dramatically 60 million dollars in june 400 million dollars in july august was close with a whopping 1.5 billion dollars in tvl this number remained at 1.5 billion dollars in september despite the cooldown across the whole defy space although october saw a drop back to around 1 billion dollars at the end of november we were once again at an all-time high with 1.6 billion dollars locked at the end of 2020 ava’s tvl was touching 2 billion dollars in 2021 a major surge in defy tokens pushed ava’s tvl to over 3 billion dollars by mid-january this is basically a 50x increase in tvl in around 6 months quite astonishing besides that ave hit another major milestone 1 billion dollars in flash loans volume additionally there were a few other important events that took place during defy summer aver three million dollars from venture capital firms three arrow capital and framework ventures who purchased ava’s native token land in july 2020 ave was granted an electronic money license by the uk financial contact authority this strategic move will make it possible for other to become a fiat gateway and easily onboard people to its own protocol on top of this also in july ave announced an upgrade to the tokenomics of the protocol conveniently named avenomics but before we discuss that if you made it this far and you enjoyed the video hit the like button so this kind of content can reach a wider audience avenomics aimed at making aven more decentralized by allowing token holders to participate in the governance of the protocol some of the most important elements of the upgrade or the migration from the land token to a new token ave in a 100 to 1 ratio new ecosystem incentives and the safety module the safety module allows for staking avid tokens and acts as insurance against a potential shortfall event if an event like this occurs up to 30 percent of the tokens staked in the safety module could be slashed and would provide a way to repay everyone affected although major shortfall events are unlikely they can still happen an example of such an event would be if a popular stablecoin loses its pack to the us dollar in exchange for staking their tokens users receives taking rewards in the form of additional other tokens currently the rewards are at around 6 annually and are generated from the protocol fees the token migration was initiated in october 2020 and went smoothly with most of the land holders exchanging their tokens in the first couple of weeks so far we’ve seen seven other improvement proposals most of the proposals involve either adding a new asset as collateral or tweaking some of the risk parameters of the already existing tokens that can be used in the protocol in the meantime the other team was relentlessly working on delivering an upgraded version of the protocol other v2 went live in december 2020 and brought a lot of new features and improvements such as collateral swap users can swap their collateral from one token to the other for example they can swap their collateral from eath to die if they believe that eath may lose value in the future collateral swap is possible thanks to flash loans and it was explained in our video about flash loans batch flash loans users can now flash borrow multiple assets at the same time all of it within the same ethereum transaction that’s tokenization in v2 borrowers receive tokens that represent their debt this in turn enables another feature native credit delegation this allows for opening up access to liquidity without providing collateral a very useful feature that can be used for example to provide a credit line to an institution a cryptocurrency exchange or even other decentralized protocol under certain conditions this feature in and of itself is probably worth creating another video let me know in the comments down below if you’d like to see it besides all of that v2 contracts are highly optimized which results in lower gas fees in some cases a user can save up to 50 percent of the gas cost when comparing to v1 other is clearly one of the most important protocols in the decentralized finance space and there is a big chance it will remain one of the main building blocks in defy for the foreseeable future one of the strong aspects of ava is its community also known as avengers with a lot of members supporting the protocol pretty much from the time of their ico due to ethereum’s popularity interacting with other and other d5 protocols can be quite expensive especially when working with small amounts of money to solve this issue other similarly to other major d5 protocols is also exploring the possibility of launching on layer 2. this should make decentralized landing and borrowing even more accessible to everyone so what do you think about ava how big will it become in the future comment down below and as always if you enjoyed this video smash the like button subscribe to my channel and check out cinematics on patreon to join our defy community thanks for watching
