Aave is the top decentralized finance project right now.
Its explosive gains have defied expectations for so long,
you have to wonder if the gain fountain is ever going to end.
Even Mark Cuban has put Aave on his radar,
kind of showing his hand in crypto.
He's a degenerate just like the rest of us.
But what are the prospects for Aave in this bull run and how high can the price go?
A lot of you guys have been asking, and you know me,
I would never ghost you.
Let's get it!
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Welcome to BitBoy Crypto!
My name is Ben.
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make sure to smash the like button so more people know about DeFi's top gainer.
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In this video,
we're going to be doing a deep dive into Aave
and I'm going to tell you how high I believe it can go in 2021 with a price prediction.
Aave was initially started as ETHLend in 2017 and rebranded formally to Aave in 2018.
The founder Stani Kulechov started the company out of his frustration
with the limited lending opportunities on the Ethereum blockchain.
He wanted to create a project that could allow users to have the utmost autonomy
in borrowing and lending across all different types of digital assets.
Kulechov also possessed a strong desire to enable users to alternate borrowing mechanisms
between variable and fixed interest rates.
Loans are also a major part of the protocol.
Aave is actually the Finnish word for ghost.
But Aave has been anything but invisible over the past year.
The fact is, while 2020 was a dumpster fire year for so many people,
Aave absolutely crushed it during this time.
Yes, Aave was one of the most talked about projects of 2020,
and now in 2021,
the hype word has grown even further.
It's even been mentioned by the likes of Mark Cuban on Twitter.
Don't get me wrong,
it's not the greatest statement to ever be made about the many wonderful things Aave has going for it.
However, Cuban isn't blasting the technology and product itself.
He's critical about the cost.
And he's not wrong.
The cost of moving crypto to Aave is expensive.
Yet, the fact that Mark Cuban is talking about Aave in the first place is a big deal.
Today, we're going to talk about what Mark Cuban as well as many other influential finance experts and wealth magnets are hyped up about.
DeFi, in general, had an epic run in 2020.
This is evident across a few key metrics.
One of the most common assessments of DeFi's incredible growth is a major spike in something known as the total value locked or TVL.
TVL represents the total value of US dollars that are locked into the DeFi market through smart contracts.
The current value of all DeFi's TVL is $27.9 billion.
That growth is outstanding considering the total TVL,
which is $1.25 billion in February of 2020.
Aave is at the top of the list for catalysts for DeFi's growth
with a $3.91 billion locked up in the protocol.
But there's actually one DeFi protocol that has a higher TVL---
Maker
which is sitting at just over $5 billion.
However, let's not confuse market capitalization with total value locked.
Of course, market capitalization is derived from multiplying the total number of coins in circulation by the price of the coin.
Again,
TVL is how many tokens are locked into the platform itself for things like collateral and staking.
That being said, Aave's market cap is worth $3.68 billion.
And the market cap for Aave crossed $1 billion for the first time in December of 2020.
But what makes Aave so special?
Well, one of the many strengths of Aave is that it allows users to earn interest on cryptocurrency
and borrow against it.
To earn interest,
someone who has a significant portion of Aave deposited
can delegate a line of credit to another party.
In other words,
Aave is allowing individuals to take on a role once largely occupied exclusively by banks.
To borrow an Aave,
you have to meet the terms that the collateral holder set out.
Every contract is put through something called an OpenLaw,
which is a contract that the counterparty terms are set to.
One of the main divisions of Aave is set up where entities can have a good credit risk liquidity option.
The constituents of the pool decide the total value of that pool
so it would be similar to Standard & Poor's rating system
where bonds are almost rated like AAA, BBB, etc.
The lenders can then decide which pools they want to provide liquidity to.
The best credit pools will be the most sought after
because the lenders want to borrow to people with good track records.
Any sort of data you can get on track records is important with lending in DeFi.
Think about it.
You're giving out money to strangers on the internet
through contracts that are computer-enforced.
Pretty wild, right?
Aave aims to provide added elements of trust in trustless financial transactions.
This "underwriting", as the banks call the process, is the only real way to vet borrowers.
Demand has also been booming for Aave's flash loan function.
Flash loans allow cryptocurrency enthusiasts to use and collateralize their portfolio
to fund other purchases.
I think the very hard thing now is the flash loans.
So you can take unlimited amount of liquidity that there is in the lending pools,
and you can-- whatever collateral,
and you can borrow and do all kinds of transactions
in the Ethereum
and return those funds.
And that's basically is the cool part
because any developer with technical skills can use that liquidity without actually owning it.
Who wouldn't want to use Bitcoin to buy a coffee without actually spending their own Bitcoin?
Me! Sign me up.
I definitely don't want to spend my own Bitcoin for it.
Others have said the same thing of course.
$1.7 billion in flash loans have been issued since the launch less than a year ago.
Now, here's another metric Aave is just crushing it with.
According to an August 2020 article of Cointelegraph,
approximately 75% of Aave users aren't using their funds.
In other words,
3 out of every 4 Aave users are hodling Aave until the sun goes down the Bitcoin empire.
That sun ain't ever going down.
This rocket is ready for Mars.
Boom!
Now, speaking of boom, how high do we think Aave can go?
If decentralized finance is truly about to boom itself again
and we aren't at a place near the top of the market,
I believe Aave can be one of the biggest gainers for sure.
I believe a 25X for Aave can definitely happen, and that might be conservative.
Call me crazy,
a lot of you guys do,
but I believe that Aave has the potential to hit $7,000 per coin by the end of the year.
And I know I've been saying this a lot on the channel lately,
but I'm hearing rumors of Chainlink, Aave and Compound going into some kind of super alliance.
And if this happens,
this could bring on mainstream adoption to the financial world.
25X may not be nearly high enough.
That's why right now my strategy is adding Aave, LINK and Compound to the mix.
What do you think?
How high can the price go?
Also, if you guys are hearing the same rumors or know anything about this potential alliance,
make sure to drop those comments down below.
Also, make sure to smash the like button on your way out
so more people will find out about the best kept secret and findings.
That's all I got.
Be blessed.
BitBoy out.