Hi everyone and welcome to my homework post for week 7. This homework post is being submitted as required by the Professor @gbenga in the outstanding lecture.

DeFi.

DeFi is an ecosystem of financial applications that has been built on Ethereum blockchain. The modern financial services facilitate users with the use of cryptocurrencies, smart contracts and features of decentralization. These financial services facilitate its users to access all the financial features of CeFi from their wallets by eliminating the central authority to manage everything. These modern financial service providers offer easy access to loans, liquidity, interest and many other financial instruments while using blockchain technology.

AAVE.

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AAVE is a DeFi cryptocurrency and also a lending platform, decentralized in nature. AAVE facilitates its users with lending, borrowing and to earn interest on the crypto assets posted with liquidity pool of AAVE system. It has been built on top of Ethereum blockchain that uses automatic smart contracts to execute transactions. AAVE’s liquidity pools can be used to deposit savings and earn interest on them.

History of AAVE.

AAVE was founded by Stani Kulechov in 2017. It was based in Switzerland. The first name of the firm was ETHLend and AAVE token’s first name then was LEND. In September 2018, ETHLend was named AAVE and liquidity pools were implemented in the system of AAVE. LEND was also changed to AAVE as the native token of AAVE system.

Features of AAVE.

1. AAVE has been built on Ethereum blockchain that uses smart contracts for execution of transactions automatically.

2. AAVE is part of DeFi movement that enables creation of lending pools that provide the users with the facility to lend or borrow different crypto assets.

3. AAVE provides the facility to borrow against collateral. It means the borrower has to deposit crypto asset as collateral against which the user can borrow upto the value of collateral.

4. Borrowers are given loan against collateral in the form of a token that is called aToken.

5. Holders of aToken are also entitled to a reward in form of interest thus the investor can see his assets grow.

6. AAVE holders also enjoy voting right. It means the holders have a say on the rules of AAVE system like rule regarding distribution of fee collected to AAVE token holders. Thus enabling token holders to vote on the changes to be made in the rules and policies.

7. AAVE system has two tokens, aToken that is issued to the borrowers and AAVE that is the native token of AAVE.

8. When a borrower post AAVE token as collateral, he is given discount in fees.

9. Flash Loan is the best innovation that has been brought by AAVE in DeFi market. Flash loan is available without any collateral. The only condition in flash loan is that the repayment will be made within the same block alongwith fee.

Conclusion.

As DeFi movement is growing, lending platforms are also growing. AAVE is one of these lending platforms and it has an additional feature of Flash Loan. It is gaining its ground and it will be adapted with the passage of time as cryptocurrency market is growing.

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Thanks in anticipation,

@steemcurator01
@steemcurator02
@gbenga

Regards,

@mawattoo8