Aave is a decentralized non-custodial liquidity protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers can borrow in an over-collateralized (perpetually) or under-collateralized (one-block liquidity) fashion.
It is a shift from a decentralized P2P lending strategy to a pool-based strategy. Lenders provide liquidity by depositing cryptocurrencies in a pool contract.
Every pool holds reserves in multiple currencies, with the total amount in Ethereum defined as total liquidity. A reserve accepts deposits from lenders. Users can 1 borrow these funds, granted that they lock a greater value as collateral.
Every reserve has a specific Loan-To-Value (LTV), calculated as the weighted average of the different LTVs of the currencies composing the collateral, where the weight for each LTV is the equivalent amount of the collateral in ETH.
Lending Pool core-
The Lending Pool Core contract is the center of the protocol, it holds the state of every reserve and all the assets deposited.
The LendingPool contract is the main contract of the protocol. It allows users to interact with the reserve. One of the advanced features implemented in the LendingPool contract is the tokenization of the lending position. When a user deposits in a specific reserve, he receives a corresponding amount of tokens, tokens that map the liquidity deposited and accrue the interests of the deposited underlying assets
The Aave protocol implements a tokenization strategy for liquidity providers. Upon deposit, the depositor receives a corresponding amount of derivative tokens, called Aave Tokens.
Aave protocol's two major innovations are
Stable rate- It helps borrower's financial planning
Flash Loan rate- to borrow without collateral during a single transaction.
AAVEUSD surged more than 50% this month. It holds above the short-term (21 and 55 EMA) and above the long-term moving average. It hit a high of $148.23 and is currently trading around $147.07.
The bullish invalidation can happen if the pair closes below $95. On the lower side, the near-term support is $129. Any break below targets $120/$100. Any breach below $95 targets $81/$70.
The pair's near-term resistance is around $150. Any breach above confirms minor bullishness. A jump to $183/$200 is possible. A surge past $200 will take it to $260/$300.
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It is good to buy on dips around $120 with SL around $90 for TP of $1.55/$2.


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