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Founded by Stani Kulechov, Aave is a decentralized finance protocol created for borrowing and lending, which performs an identical role to money markets in traditional finance. The platform enables users to deposit digital assets into liquidity pools, earn interest in the form of aTokens, and borrow digital assets through over-collateralized loans. Aave offers Flash Loans—a short-term loan mechanism.
AAVE Lending and Borrowing
Like peers such as Compound and Maker, Aave’s core business is lending and borrowing platform. Aave currently supports >20 cryptocurrencies (such as ETH, DAI, USDT, USDC etc.) on its platform. This is how the process works: a depositor who, for example, deposits ETH will receive an aETH token in exchange. This token is interest baring, which means that when the depositor wants to withdraw their deposit, they can return the aETH and receive their original ETH plus the interest collected. During the loan period, the ETH will be deposited in a pool from which borrowers can submit collateral in any other currency and borrow ETH. All loans are overcollateralized, which means the value of the collateral must be higher than the received value of the borrowed asset; borrowers can then choose between a fixed and variable interest rate. Loans are also of an indefinite period, which means that a borrower can hold the borrowed asset for as long as they like, provided the price of the collateralized asset remains above a certain level. Aave keeps the spread and charges a 0.00001% fee on all loans at origin.
METHODOLOGY
In this dashboard, i try to give an overview on the borrowing and lending side of Aave and should cover topics such as:
- Aave v2 total borrows on ethereum.
- Aave v2 total deposits on ethereum.
- Aave v2 deposit and borrowing over time.
- Deposit supply for each asset.
- Borrowing amount for each asset.
Number of wallets borrowing and lending: 1.Aave v2 on Etheruem daily user activity 2. Total Unique borrowers 3. Total Unique depositors
General Inferences
The total AAVE V2 borrows on ethereum is $64.6bn while $229bn was deposited. According to the visual showing deposit supply of asset, WETH has the highest deposit followed by DAI, USDC, USDT etc, respectively. USDC has the highest borrowing amount, this may be due to the value of the asset as it is a stable asset in comparison to other assets. USDT which is also considered a stable asset followed the USDC. Ethereum deposited in Aave is higher than the asset borrowed. With the highest deposit on 13 August. There were more user activities in the month of April. 48.3k users borrowed within the period considered while 118.3k users deposited into the liquidity pool.
NOTE: There were more user activities in the month of May every year.