Aave Token (Ethereum)

AAVE

AAVE is the governance and utility token of the Aave protocol. It is used as a mitigation tool to insure the protocol in case of deficits.

Risk Rating

Best

$62.71

6.02%

Summary

What we like

AAVE is the governance and utility token used to vote on the future direction of the lending platform. Holders may stake the token to secure the platform and earn inflationary protocol emissions.

What we like less

The asset does not have a direct revenue accrual mechanism for protocol fees to be redistributed back to token holders.

What it means for you

Holding AAVE can be a great way to indirectly benefit from the success of the platform over time as protocol fees are used to buyback and burn AAVE, which adds deflationary pressure on supply and upward price pressure.

Information

Blockchain

Ethereum

Info

Key Metrics

Market Cap: $898.1M
Fully Diluted Valluation: $996.4M
FDV / MC: 1.1
Ranking inside Exponential (excluding stables): #16
Circulating Supply: 14,422,640
Total Supply: 16,000,000
Total Supply: 16,000,000
Volume (24H): $52M
ATH: $661.69 (05/18/2021)
ATL: $26.02 (11/05/2020)

Risk Assessment

Best

Asset Strength

AAVE is a mid-cap asset that represents the protocol's native governance or utility token. This asset is exposed to the underlying risks of Aave, a protocol rated as Best in Class. AAVE is the governance token of the Aave protocol, and also serves to secure the protocol by backstopping liquidity crises in the system in compensation for additional staking yield. The asset has a fixed supply.

Asset Volatility

AAVE is highly correlated to the overall market.

Dependencies

Aave V3

Things to know about AAVE

What is AAVE used for?

The AAVE token has two main uses cases: governance and securing the protocol. AAVE holders govern the future direction of the platform through community voting. Second, token holders may stake their AAVE in the security module to earn inflationary protocol emissions. In exchange, AAVE stakers bear the risk of a liquidity crisis (or referred to as shortfall events) in which their stake may be slashed up to 30%.

AAVE tokenomics

The total supply of AAVE is capped at 16M tokens. Of this amount, 13M were redeemed by LEND token holders and the remaining 3M were sent to the Aave Ecosystem Reserve. The Aave protocol will distribute AAVE tokens to incentivize supplying and borrowing assets across its different chain deployments.

How does AAVE accrue value?

Aave currently does not have a direct revenue accrual mechanism. Instead, AAVE token holders indirectly benefit from protocol fees generated from a portion of reserve revenue and flash loan fees which are sent to the Ecosystem Reserve. The protocol then purchases AAVE tokens from the open market and burns them to drive down supply and increase price pressure.

AAVE Pools

Aave AAVE Safety Module