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Aave (AAVE) is coming to BitBuy, which means Canadian customers will have the opportunity to trade this coin for the first time; this exchange is the first in Canada to list it. But who should be keeping their eyes out for this coin? First—anyone looking to diversify their altcoin portfolio, but also those interested in the underlying project. To help you decide whether AAVE is your next big investment, we have assembled the most important things you need to know about this coin and its native project.
DeFi: The New Way of Doing Business
Decentralized finance (DeFi) is nowadays a completely separate industry that does not rely on traditional finance for anything—everything you can do with legacy finance, you can do within DeFi as well, without intermediaries and expensive third parties.
One important aspect of finance in general is the ability to borrow or lend funds. If you borrow, you get the funds you need very quickly, especially if you have an illiquid collateral to use. If you’re lending, you’re incentivized by the market with fees paid to you. In DeFi, everyone wins—without an authority to make sure everyone plays by the rules, the market itself must offer rewards for positive behavior, which serves as an excellent incentive. This means that in DeFi, everyone has the same access to pools: if you want to borrow, you can find someone who is willing to lend, and both of you are rewarded for your positive interaction—which is where Aave comes in.
How Does Aave Work?
Aave is the name of one of the biggest Ethereum-based money markets currently available. If you have unused funds sitting around, you can lend them out here and receive a return; if you have funds in one cryptocurrency but need another without wanting to swap them, you can borrow the desired altcoin while using your other crypto as collateral, receiving it back when your debt is paid off.
As the project is an algorithmic money maker, you don’t need to worry about your offer or request not being fully matched by another party. Loans are obtained from a pool in which lenders keep their funds. All loans are overcollateralized: regardless of how much you need, you will have to deposit more to be able to borrow.
Aave also offers so-called flash loans that last only for the duration of a single Ethereum block. They’re not collateralized, and they’re mostly used by highly skilled traders for arbitrage. Generally, most users are discouraged from taking out flash loans if they’re unsure they can handle them.
The capitalized version of the project’s name is its token AAVE. It introduces a Safety Module, which ensures that, should liquidity run out, the Safety Model would make up for that deficit. However, its wider use case is in governance: holders of the cryptocurrency can discuss and vote on Aave Improvement Proposals. One coin means one vote, which helps decentralize the network further.
The use case for the Aave project is doubtlessly pervasive, meaning both the project and its native coin will be around for a while yet. For users who feel strongly about the opportunity for borrowing and lending through a decentralized platform, and especially users who want to make a difference, holding AAVE would mean getting a choice in the direction the project may take. But even without that, a coin with a strong foundation is always a good choice for those looking to diversify their portfolio.
How to Buy AAVE in Canada
Bitbuy is currently the only Canadian exchange offering access to the AAVE coin. Both complete beginners and experienced veterans can find trading options for themselves here:
- For beginner traders: Bitbuy Express Trade is an option allowing you to set up your trade quickly and is meant for market orders—in other words, buying assets at the market price.
- For experienced traders: if you want more options than what Express Trade allows, Pro Trade has got you covered: here, you will get detailed widgets that provide an advanced trading interface. You can place both maker and taker orders this way, follow charts and statistics, as well as everything else you may need for advanced trading.
If you reside in Canada and if you don’t already have a Bitbuy account, you can register here to start trading AAVE and receive CAD 20 once depositing CAD 250+. Here are the steps on how to claim your bonus:
- Follow this link and register with the exchange.
- Make a deposit of at least CAD 250 (but you’re always free to add more!)
- A deposit bonus of CAD 20 will be automatically added to your account.
- Happy trading!