DeFi protocol like Aave Development Solutions

With the inception of Decentralized Finance, several financial services in the cryptocurrency spectrum have witnessed the convenience and advantages DeFi has to offer and are jumping on the bandwagon. One of these services is the lending and borrowing of crypto assets. And the leading protocol in the DeFi space offering is Aave - an open-source non-custodial decentralized platform for lending and borrowing, where users can earn interests on deposits and borrow crypto-assets.

At Blockchain App Factory, we offer dexterous Aave like protocol development services. Our experience in developing and launching various DeFi protocols and platforms like DeFi Smart Contract development, DeFi Synthetic Assets development, DeFi tokenization development, and more gives us an edge over our competitors in the market. Our Aave like protocol development is sure to not fall short of international standards.

Defining Decentralized Finance

Decentralized Finance has been a hot topic of discussion in the crypto space this year and will remain so for a long time. Why? It has given the solution for one of the biggest problems in financial services - Centralized systems. Apart from having full control of one’s funds and assets, centralized authorities were not secure from breaches and hacks. They levied huge transaction fees, and reliance on third-parties was heavy.

Come DeFi, a permissionless, transparent, immutable, and open-source platform where buyers and sellers could interact, the Cryptocurrency ecosystem’s market dynamics shifted. Running on the Ethereum network, Decentralized Finance makes use of Smart Contracts, making third parties obsolete. With just a smartphone and an internet connection, users could efficiently manage their digital assets. Now, a copious amount of DeFi applications and protocols exist, expiating various financial services.

Aave - The Top lending and borrowing protocol in the DeFi ecosystem

Aave is a DeFi lending protocol that allows its users to lend and borrow crypto assets and earn stable or various interest rates. Translating into ‘Ghost’, the Finnish based platform aims to create a transparent, permissionless environment for DeFi lending and borrowing. It is an open-source, decentralized network and proudly holds accolades like becoming the market leader in the lending and borrowing DeFi space.

Apart from the typical features seen in other lending platforms like Compound, Aave has extra benefits to boast of. They furnish users with Flash Loans, uncollateralized loans, rate switching, and unique collateral types.

The Aave protocol leverages a native token LEND, set to be swapped to a token called AAVE. These governance tokens can be staked for insurance to earn fees and Aave rewards. The token holders also have earned the right to governance within the DeFi protocol.

Since its launch, the protocol has made history in the DeFi space with over $1 billion market size in less than six months. Today, by availing of our DeFi protocol like Ave development solutions, you can provide users with a similarly intuitive and remunerative platform and make high returns!

How does lending and borrowing work in Aave?

Aave has grown to become the prominent DeFi lending and borrowing platform. But why? There are primarily two functions that a user can do in the protocol, like Aave - Lending and Borrowing. Those wishing to lend will simply need to login on to the platform and deposit crypto-assets into the liquidity pools within the protocol, governed by Smart Contracts. The protocol allows depositors to earn a passive income in the form of stable or varied interest rates or APY, which solely depends on the prevailing market conditions. The Aave protocol supports around 20 cryptocurrencies, but not all crypto assets are supported or used as collateral by the platform. Some include - DAI, ETH, BAT, LINK, MANA, MKR, SNX, USDT, USDC, TUSD, USDT, sUSD, BUSD, KNC, LINK, wBTC, ZRX, and of course, LEND.

Borrowing, on the other hand, is also a straightforward process. Users wishing to borrow will simply need to mention the quantity they’re borrowing, and with it, provide collateral that is worth higher than the amount being borrowed. In other words, the locked up collateral must be greater than the amount borrowed to maintain the collateralization ratio. If this ratio is not maintained by the borrower, other users can liquidate it.

Irrespective of whether users are lending or borrowing, they will be provided with aTokens in exchange for their participation with the protocol. For example, if a user deposits 10 Dai tokens, they will receive 10 aTokens. They accrue interest for those lending in the Aave protocol, and these tokens can be redeemed on a 1:1 basis. The Aave protocol, equipped with liquidity pools, will deal with issues like providing liquidity and optimizing volatility of the assets if and when lenders want to withdraw their assets from the pool. The protocol is built to face each and every challenge typically encountered in the DeFi space, making it a successful project among DeFi maniacs.

Aave’s native token - LEND

Formerly known as ETHLend, the rebranded LEND token is the utility and governance token for the Aave protocol. It is developed using Ethereum’s ERC-20 standards. The token has several use cases-

Giving token holders voting rights

Setting interest rates

Listing new assets and

Liquidation configuration

Discounts on transaction fees

LEND investors get a share of transaction fees for securing the protocol

Pragmatic features of our Aave like DeFi protocol

Our protocol, like Aave, is built with features and functionalities that let users perform a myriad of financial transactions and services. Some of the prominent functions of the Aave like protocol include

Flash Loans

It is probably the most eye-catching component in the Aave protocol, Flash loans allow borrowers to loan out huge sums of cryptocurrencies without collateral, unlike how borrowing usually works in the Aave protocol. This simple aspect has now attracted a huge user base to the protocol. Instead of relying on collateral to protect the assets, the Aave protocol relies on the timing of the borrower’s repayment. They will be required to pay back the assets on the same Ethereum Block it was issued in. If the borrower fails to pay back the loan at the right time, the entire transaction will fail.

Flexible interest rates

The Aave protocol offers an interesting feature most lending platforms don’t - Both stable and flexible interest rates. Interest rates usually fluctuate a lot in lending protocols. For instance, when a huge amount is borrowed from a pool, the demand for that particular asset increases, which brings down the available liquidity, simultaneously increasing the depositor’s interest rates. With the Swap Rate feature, users can swap between a stable interest rate or the flexible one.

Credit Delegation

this is a simple transaction process where users who are only interested in lending to the protocol can delegate a credit line to someone they trust. A credit line is a facility extended to customers to draw on a facility to access funds if necessary. Employing Smart contracts, a user can delegate extra credits to another trusted user as a form of peer-to-peer lending.

Unique collaterals

The protocol offers a diverse variety of DeFi collateral types, which include DAI, ETH, BAT, LINK, MANA, MKR, SNX, USDT, USDC, TUSD, USDT, sUSD, BUSD, KNC, LINK, wBTC, ZRX, and LEND.

Create a robust Aave like protocol with Blockchain App Factory’s Developmental solutions

With Decentralized Finance making a huge splash in the financial services industry and more crypto enthusiasts open to the idea of having full custody over their funds, lending protocols like Aave are a popular choice for users for their lending and borrowing requirements. You, as a budding entrepreneur or a full-fledged business, can leverage this boon in the DeFi space by making use of our DeFi protocol development services.

With several years of experience with Blockchain technology and DeFi protocols and applications, we can turn your ideas and visions for an Aave like protocol into a successful reality. Our development services include round the clock support, complete white-label and customizable platform development built by skilled and adept developers who strive for perfection. What more, our Aave protocol development extends to other blockchain networks in the likes of TRON, EOS, and Binance Smart Chain to give and your users far-reaching benefits.

Get in touch with us soon so we can work together on launching your own Aave like protocol for a profitable gain.

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