What is Aave?

(Source: AAVE)

Aave is a decentralized, non-custodial liquidity protocol where users can participate as suppliers or borrowers. Suppliers provide liquidity to earn interest, while borrowers can obtain funds through over-collateralization. Since its inception, Aave has become a crucial pillar in the DeFi space, attracting a large number of users with its innovative Flash Loans and support for multiple assets.

Market Position and Circulation of Aave

Aave’s market share in the DeFi protocol remains stable. According to the latest data, its Total Value Locked (TVL) has consistently ranked among the top five DeFi protocols. As the governance token, AAVE not only allows participation in community voting but also enables users to earn additional income through staking, which contributes to the stable demand for AAVE in the market.

(Source: DefiLlama)

Factors affecting AAVE price

1. The overall performance of the DeFi market: Aave’s performance is highly dependent on the overall DeFi market. If the market rebounds, the demand for AAVE will increase accordingly.
2. DAO consensus and governance decisions: The Aave community’s acceptance of new proposals will affect market confidence and prices.
3. Regulatory policy changes: The regulatory stance of various countries towards DeFi will directly impact Aave’s market demand.
4. Market sentiment: Macroeconomic changes, innovation from competitors, and fluctuations in the cryptocurrency market may all affect the short-term price of AAVE.

Horizon Project

Aave’s recently proposed Horizon plan aims to introduce Real World Assets (RWA) into the DeFi ecosystem. This plan collects opinions through community sentiment checks. Although this plan may bring new asset types and more market opportunities for Aave in the future, a proposal regarding the issuance of new tokens has sparked community discussions, raising concerns about diluting the value of AAVE.

In response to the community’s concerns, Aave’s founder Kulechov also promised to respect the consensus of the DAO and not forcibly promote the issuance of new tokens, a decision that has gained wide support in the community and reinforced Aave’s decentralized governance principles.

(Source: @StaniKulechov)

AAVE price prediction

By calculating the data through AI models and referring to the past AAVE prices and related information, predictions are made about future prices, which are for data sharing purposes only and not investment advice. Refer to the following chart:

AAVE price prediction trend

AAVE Price Prediction and Confidence Interval

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Summary

If Aave’s Horizon plan can be successfully implemented, it will open up a new market space and drive up the value of AAVE. With the popularization of DeFi and the deepening of decentralized governance, Aave’s market share is expected to continue to expand. However, the regulatory trends and technological innovations of competitors remain potential risks that need to be monitored for future trends and developments.