Borrowing

@borrowing

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When users deposit assets into one of Aave's liquidity pools, aTokens (e.g. aETH) are created for them. aTokens must be claimed. They have the same value as the collateral deposited. aTokens earn interest in real time. These tokens can be exchanged for the underlying asset (collateral) at any time. They also entitle holders to a portion of the fees earned from flash loans.

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So how does Aave maintain liquidity in the system? Not all loans require overcollateralization, except for flash loans, which typically last only a few seconds. It automatically liquidates the collateral of borrowers who cannot maintain the loan-to-value (LTV) ratio to pay off some of the debt and restore liquidity. LTV determines the maximum amount that can be borrowed with a given amount of collateral. I wonder what Aave's LTV is? 75%

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How Aave Works Aave was originally built on Ethereum as a multi-chain DeFi protocol that supports multiple blockchain networks, including Fantom and Avalanche. This is what makes Aave unique. It supports Ether and other ERC-20 tokens (tokens built on the Ethereum ERC-20 standard) and operates in a peer-to-peer, decentralized manner using smart contracts.

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In a nutshell Aave is a decentralized finance (DeFi) lending protocol. According to DeFiLlama, it is the second-largest DeFi protocol in the world by total value locked (TVL). Aave maintains liquidity on its platform by requiring all loans, except short-term or flash loans, to be overcollateralized and have a fail-safe liquidity pool called a security module. AAVE's native tokens are used for governance and can be staked in the security module to earn rewards.

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The decentralized protocol manages debt by ensuring that all loans (except instant loans) on the platform are overcollateralized. This means that the value of the collateral must be greater than the loan itself. If the value of a user’s collateral falls below a certain threshold, it is automatically liquidated to pay off part of the debt. This ensures that there is always enough liquidity in the system.

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Aave, formerly known as ETHLend, is a decentralized, non-custodial lending protocol that allows you to deposit assets into liquidity pools to earn returns and borrow assets at a flat, fixed interest rate. It was launched in 2017 by Stani Kulechov after a $17.8 million initial coin offering (ICO). Aave also allows you to borrow without collateral in a short period of time — flash loans.

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Any loan or credit must be repaid, as it is a factor of trust that is difficult to earn, easy to lose and the hardest thing to maintain, I would like people to be reasonable and prudent about loans

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Investments for the rich, loans for the poor, why? Because investments require abstraction from them, as well as financial independence from investments, but the poor are poor for a reason, that something always happens to them and they have to say goodbye to investments, and loans are just a tool that allows these problems to be solved

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Debt is a way to double your value in seconds, but it requires trust

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Compound - a protocol for lending and borrowing

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I like to borrow money - consumer economics, I like to lend - entrepreneur economics

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Any credit relationship is built on trust, on trust built through experience and time, or simply on benefit and on paper.

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I personally believe that loans allow you to manage the result and increase it, but you need to have nerves of steel

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Loans are an extremely dangerous thing, especially anything above 3x, be very careful!

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Help Farcaster borrow attention!

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Before you borrow money you need to become disciplined

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AAVE - best place for borrowing

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Profit on DeFi = Base activity, Base Chain, Base Ecosystem, Base + AAVE

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