How to Buy AAVE Tokens in Canada

“Aave is an open-source, decentralized lending and borrowing protocol where crypto holders can deposit their tokens to earn interest without middlemen.”

Aave was founded by Stani Kulechov in 2017 under the name ETHLend. In September 2018, the project rebranded to Aave. It is now a decentralized finance protocol that allows users to lend and borrow cryptocurrencies. AAVE is the platform’s native cryptocurrency and governance token, providing holders with several benefits in the form of decreased fees and a chance to vote on key changes made to the project itself.

If you are wondering how to buy AAVE tokens in Canada, Netcoins is a publicly-traded, fully regulated crypto trading platform based in Canada. With 0% funding fees, free cash withdrawals, and live customer support service seven days a week, we make it simple for Canadians to buy AAVE and other cryptocurrencies.

Why Buy AAVE?

Aave can be considered a decentralized marketplace that matches crypto borrowers and lenders together. As the native cryptocurrency and governance token of the Aave platform, AAVE acts as an investment in the platform’s future growth and success. The platform offers AAVE holders several perks that holders can leverage to their benefit. These perks exist within the Aave ecosystem and involve the platform’s two central counterparties: borrowers and lenders.

Additionally, as the platform’s governance token, AAVE holders can vote on key decision-making to further improve and develop the platform. The perks and power gained through holding AAVE tokens are some of the paramount value propositions offered by the token. Given the platform’s correlation to the token, the biggest reason to buy AAVE is if you have an inherent belief in the future growth of the Aave platform.

There is also a supply cap of 16 million AAVE tokens that can exist at any point in time. This makes AAVE a deflationary asset and a hedge against things such as inflation.

How Is AAVE Unique??

Aave was one of the first chains to allow for the borrowing and lending of cryptocurrencies. With this in mind, the platform differentiates itself with its deep product offering, reputation, and perks facilitated by the project’s native cryptocurrency.

Since its launch, Aave has expanded to enable borrowing and lending markets for a wide range of assets on over half a dozen networks. With total value locked on the platform reaching nearly $20 billion USD in late 2021, it is clear that users believe in Aave’s unique value proposition.

The potential perks earned by holding AAVE tokens further differentiates the platform from its competitors. To begin, holding AAVE gives users access to decreased trading fees. Users who wish to borrow AAVE do not get charged a fee. Those who offer AAVE as collateral when taking out a loan can get discounts and take out larger loans.

Related article: Fees to Consider When Choosing Your Crypto Platform

What Can You Do With AAVE?

There are several things that can be done with your AAVE holdings to reduce fees, earn income, and excerpt influence on the project. After connecting your web-based wallet to the Aave platform, your AAVE token holdings can be used within the platform to reduce fees when borrowing and lending.

Additionally, the platform offers the opportunity to stake your AAVE tokens within the Safety Module in return for yield. However, this does come with risk as the platform has the right to slash 30% of the stake in the event of a shortfall event.

Finally, connecting your tokens to the Aave platform allows you to participate in the voting process behind changes made to the project.

What are Flash Loans?

One of Aave’s features is “flash loans,” which allows loans to be issued and settled simultaneously. It takes advantage of the time delay in processing transactions on certain blockchains (for Ethereum, that is 13 seconds). Traders can use this to take advantage of trading opportunities and maximize profits.

How Much AAVE Can I Buy?

AAVE, like other cryptocurrencies, is highly divisible. You can buy a whole AAVE token or fractions of it. When opting to buy AAVE, using a platform like Netcoins allows you to buy whatever dollar amount of AAVE you would like.

Several options are available to fit your investing strategy, whether it be buying a single token, several tokens, or fractions of a token. Buying AAVE tokens in regular intervals (like days, weeks or months) is known as dollar-cost averaging and can be a great way to average the price you buy. All of these options are available on Netcoins, Canada’s first publicly-owned, fully regulated cryptocurrency exchange.

Related article: Three Ways to Make Your Crypto Assets Work for You

Do I Store My AAVE?

You can buy AAVE tokens from crypto trading platforms, like Netcoins, and leave your AAVE tokens inside the platform. However, there are much safer options to storing your AAVE tokens as leaving them in exchanges can expose them to certain risks like hacking and theft.

The safest option to keeping your AAVE secure is to transfer them into an AAVE wallet. An AAVE wallet is a type of digital wallet that is used to send and receive AAVE, similar to a Google wallet or a physical wallet.

There are four different types of AAVE wallets: hardware wallets, desktop wallets, mobile wallets and web wallets.

Hardware wallets look like a USB device. They are considered to be offline wallets because they’re not connected to the internet. The fact they’re offline makes them more difficult to find and to hack. As such, they’re typically considered the safest option to store your AAVE.

Desktop wallets on the other hand are programs that store your AAVE on your computer’s hard drive. Mobile wallets perform the same function as a desktop wallet but on a mobile device instead.

Finally, a web wallet is an online service that sends and stores your AAVE on your behalf anywhere, anytime. Similar to checking your email.

Desktop, mobile and web wallets are all connected to the internet (and referred to as “hot wallets”). Like mentioned earlier, they are more susceptible to potential risks. On the other hand, hardware wallets (or “cold wallets”) are considered safer options as they are not connected to the internet.

This is why it’s often advised that Canadians pull out their AAVE from crypto trading platforms and send them directly to a hardware wallet. Only in this way, are they in full possession of their AAVE and can keep them secure.

By connecting an eligible crypto wallet to the Aave platform, you can cash out your funds through the platform. Keep in mind that withdrawals will involve gas fees.

Related article: How Do I Keep My Cryptocurrencies Safe?

Is AAVE a Good Investment?

AAVE presents an interesting opportunity for investors, acting as both an investment that has the potential to appreciate over the long run and a utility token with benefits.

Connected to a project with a strong reputation, track record, and product offering, AAVE may be a solid bet on the decentralized cryptocurrency lending space. The token’s future price performance will be dependent on several factors, including the general direction of the crypto market.

However, as long as the project continues to differentiate itself through innovation and development, Aave may continue to command a dominant lead ahead of its competitors. If you believe in decentralized finance, Aave could be a project to consider with both a solid foundation and potentially a bright future.

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This post is for informational purposes only. For proper financial advice, we recommend you speak to a financial advisor.