Cryptocurrency is a type of virtual money that is created directly on a computer network and is a form of payment that can be exchanged online for goods and services. There are more and more alternatives in the digital marketplace and there is some competition between them. You read about different cryptocurrencies every day, but what is their actual status in Somalia? The truth is that cryptocurrency is still in its infancy, and discussions often lead to philosophical speculation rather than hard facts. Today, cryptocurrency is not regulated in the market, but it is possible that changes may occur in the future. The cryptocurrency is independent of a third party and therefore cannot be affected by the policy rate or by the government creating more money to influence inflation.
The cryptocurrency entered the global stage in 2009 and has experienced both ups and downs since then. The new digital currency only exists on the Internet.
This phenomenon has generated a lot of criticism, but there are also many stakeholders. These are those who want to reduce the influence of banks and governments, those who want to improve the efficiency of cash flows, and those who care about easier international trade.
Cryptocurrency is a hot topic for investors. First of all, the main focus is on cryptocurrency trading not as a means of payment. This is largely due to the fact that cryptocurrency is currently relatively unstable and can fall or rise in price quite quickly.
Hypothetically, there could be such a situation: if you buy a carton of milk for a certain amount of digital currency today, you could buy a new car for the same amount in a month or two.
Today we present to your attention one very interesting topic - investing in Aave in Somalia. Is it profitable to invest in a ghost coin? Read about it below.
What is Aave? A Brief History of Aave
Ten years ago, no one would have thought that it was possible to open a credit organization that would lend money to anonymous clients. But with the development of the cryptoindustry, a need arose for decentralized lending platforms operating in peer-to-peer payment systems. In order not to become dependent on external regulators, and not to violate the confidentiality of financial transactions, it is necessary to conclude loan agreements using smart contracts, ensuring creditworthiness with an internal collateral token.
Aave (AAVE) is one of the best known Decentralized Finance (DeFi) protocols that allows people to lend and borrow cryptocurrencies by creating liquidity pools.
In fact, it was the first DeFi lending protocol when Aave launched its first mainnet as ETHlend in 2017 (this was before DeFi even came along!).
The history of AAVE dates back to November 2017. The founder of Aave is Stani Kulchov. Stani is passionate about working with leading developers from other projects in the DeFi space and has a particular focus on making the platform attractive to institutional and retail investors both inside and outside the cryptocurrency. In short, ETHlend was a kind of marketplace where borrowers and lenders could negotiate terms without involving a third party. The platform was moderately successful, but the team decided they were "ready to be serious players" in the DeFi space. In 2019, the developers abandoned the P2P system of negotiating loan agreements and launched a pool of decentralized assets. Lenders became liquidity providers, receiving passive income without the need to keep track of repayments and liquidations, and borrowers were able to put collateral into the protocol and receive loans against them instantly.
How does Aave work?
The word Aave comes from Finnish and means a ghost. The ghost name illustrates the purpose of this protocol - to be transparent and open in the DeFi (decentralized finance) space.
In short, Aave works like this. The user invests the funds he wants to lend, providing liquidity in the market. These funds are accumulated in the general fund. Those users who want to borrow this asset receive it from this fund. And with these assets that they borrow, they can do whatever they want. Buy, sell, or even transfer them to where they need them!
Aave issues two types of tokens to run this ecosystem. The first type is the aToken, which is received by the user who placed their assets in the general fund, thus receiving interest on the deposit made. Another type is the AAVE token, the project's own token.
This cryptocurrency offers several benefits to its holders. For example, this gives you the right to vote on proposals for future changes that you want to make on the platform. In addition, these owners can act as “stewards” of the decentralized management of the project itself. In addition, AAVE borrowers do not need to pay a commission if they borrow the token itself.
AAVE users, if they pay commission to AAVE, can examine loans before they are published. Borrowers using AAVE as collateral may also borrow a slightly larger amount. Consequently, this system uses complex structures based on game theory to stimulate different parts.
This crypto asset is positioned quite well compared to the rest of decentralized finance or DeFi competitors. It is currently ranked among the top three most important protocols in terms of overall blocked value (TVL). It is currently about $ 9 billion.
The AAVE protocol essentially provides liquidity to the decentralized financial space. This allows anyone to earn interest or borrow their assets, converting assets from liabilities to assets. The project allows investors to have long positions in their assets, regardless of their composition, while maintaining working capital.
AAVE is available for purchase, sale, or storage.
Launching Aave Pro
In June 2021, Aave announced the launch of the Aave Pro. The protocol will use private pools to provide institutional investors with direct access to decentralized markets, where these pools will operate separately from existing ones.
Another notable feature of Aave Pro is that they want to use separate pools from whitelisted users who have approved Know Your Customer protocols. This avoids one of the biggest hurdles in terms of regulated entities participating in DeFi.
Aave currently manages approximately $ 18 billion in assets on its platform.
Hence, we can expect a sharp increase in the use of AAVE tokens thanks to the demand from these private pools. This could lead to an increase in the price of AAVE.
How is Aave priced?
The main and very important variable is market capitalization. It adds up the total amount invested in Aave. In simple terms, this is the sum of all money invested in cryptocurrency around the world. This is important because it is an indicator of market maturity.
The Aave price is the value that a cryptocurrency has in the market and it depends on the market capitalization and its quantity or volume in circulation (the total amount mined to date), that is, the supply that the digital currency has at a given moment. time. This is why understanding capitalization and currency as concepts is very important, since price is the result of dividing market capitalization by currency.
The cryptocurrency market seems to be recovering rapidly in the past few weeks. After falling over the past two months, the cryptocurrency market remains stable or is growing steadily. For now, it looks like the digital asset industry can finally grow again and again.
The AAVE charts have been doing great in recent days. In addition, the AAVE price is showing an uptrend. If this trend continues, AAVE could break through the resistance level and move even higher.
How to invest in Aave in Somalia?
You can invest in Aave in Somalia through direct cryptocurrency purchase. An investor who wishes to choose this alternative will buy the cryptocurrency they want and later the cryptocurrencies will be stored in a “digital wallet”. The investor can sell them if he thinks they have reached an attractive price, or, also, to minimize losses if the cryptocurrency market turns bearish after purchasing them.
With a direct purchase of cryptocurrency, positive income is obtained only if the price of the cryptocurrency increases in value!
An alternative to buying direct Aave is investing through CFDs (Contracts for Difference). CFDs are contracts that agree to buy or sell Aave on a specific date and at a specific price. Their essence is that by investing with CFDs, you are not buying cryptocurrency. Profitability is determined by the change in the Aave price from the moment the position was opened until the moment it was closed. When investing in derivative products, since you do not own the asset in which they are invested, there is no risk of losing or stealing cryptocurrencies.
CFDs allow you to take advantage of the volatility of digital currencies and generate positive returns regardless of whether the price of the cryptocurrency moves up or down:
- If a trader thinks that the price of Aave will go up, he will buy CFDs. If you think the price increase is enough, you will close your position by selling your CFDs. Its result will be proportional to the rise in prices for Aave.
- If, on the contrary, the investor thinks that the price will fall, he will sell the CFD. When you think the downside has passed, you will close your position by buying your CFDs.
It can also happen that the change in the price of the cryptocurrency does not meet the expectations of the trader. In this case, in order to minimize losses, it is necessary to close the deal. In this sense, it should be noted that when trading CFDs on digital currencies, given their high volatility, proper risk management is necessary. To do this, when trading CFDs on cryptocurrencies, it is necessary to determine the Stop-Loss levels at which the operation will be closed if the market contradicts the direction of the open position.
Trading CFDs also allows you to invest using leveraged funds. Leveraged investing means that you can get better results than the actual capital available in the trader's account. With the help of leverage, you can multiply your profits.
Reasons to Invest in Aave Today
Is Aave a good digital currency to invest in 2021? Let's take a look at some of the reasons we think it's obvious to invest in Aave this year:
- Aave has established itself as a reliable and profitable digital currency in the market. Recently, not only its price has increased, but also its capitalization.
- Aave is synonymous with speed and safety. As a reminder, with Aave you can make an international payment in just a matter of minutes.
- Transaction costs are significantly reduced compared to other cryptocurrencies.
- High blockchain technologies.
- It is a very stable cryptocurrency and important banking institutions and various financial groups have joined its network.
Where can you buy Aave?
If you are interested in investing in cryptocurrency and want to buy Aave in Somalia, you can start right now. But first, you need an answer to the main question: where is the best place to buy Aave?
There are different ways to buy in Somalia cryptocurrency in a few clicks. You can start with exchanges. Exchanges usually offer a full range of procurement services. Purchased cryptocurrencies can be bought, sold (in particular, traded) and stored. In this context, one of the safest and most popular ways to buy cryptocurrencies is through personal trading (known in English as peer-to-peer or by the abbreviation p2p).
In these transactions, users deal directly with their colleagues on the cryptocurrency trading platform. Aave is available on major cryptocurrency exchanges such as Binance, Coinbase, Kraken or FTX, etc.
To work with cryptocurrencies, you can find a reliable broker and use the trading platform. Buying Aave through a broker is much easier than buying an Aave on an exchange. The process of registration and making a deposit will delight you with its simplicity!
The world of virtual currencies never stops and new offers appear almost daily. In addition, the technology sector is one of the fastest growing in this very challenging year. You can already invest in Aave in Somalia today. The opportunity to make money on cryptocurrency is what attracts many. Getting started is easy, even if you've never traded digital currency before.
Those who decide to buy an Aave should know that this Aave has good value and, according to experts, could grow further in the future.
Test the modern trading platform today and find out about its capabilities! You will definitely succeed! We wish you profitable deals!