Blog Crypto Aave (lend) Coin Review: Is Lend A Good Investment Today?

Aave (lend) Coin Review: Is Lend A Good Investment Today?

date February 2, 2021 time 6 min read 1249 views

As an investor, you’d likely be happy doubling or even tripling your capital. The LEND coin broke headlines for netting investors over 1,600% in gains in 2020. With such impressive figures, should you bet on the LEND coin? Find out in this article.

Should you invest in the LEND coin today It’s probably too late
Should you invest in the LEND coin today? It’s probably too late (source: aave.org)

Just 6 months after LEND coin went live under the ETHLend’s new Aave protocol in January 2020, it gathered $158 million in collateral deposits (over 5X what popular DeFi platform Compound garnered in its first 6 months). 

LEND also made it past the 1,600% growth mark in 2020. Its outsized growth was driven by unique DeFi features and upgrades on the Aave protocol like DeFi flash loans (uncollateralized loans) and its own mainnet. 
With such tremendous growth, should you bet on the LEND coin?

Surprisingly, no, you shouldn’t and we’ll explain why below. In this LEND coin review, we’ll also tackle LEND coin history and the future of LEND coin investing.

What is LEND coin?

LEND aka Aave coin (old) is the former native token of the Aave protocol (and Aave is formerly known as the ETHlend lending platform). Aave is a platform for borrowing, lending, and earning crypto through decentralized finance. 

LEND holders could use their coins to:

  • Carry out DeFi transactions including borrowing, lending, and earning interest on deposits on Aave. 
  • Vote on Aave Improvement Proposals (AIPs) and also earn protocol fees for protecting the site against malicious borrowers.

LEND replaced the former EthLEND token on the 1st of January 2020. The shift to the new Aave platform also came with a shift in strategy. The original ETHlend was based on an individual peer-to-peer loan matching system while Aave is a decentralized lending pool-based platform.

The future of LEND coin: The shift from LEND coin to AAVE 

Here’s why you probably shouldn’t buy Aave (LEND) right now: It has been replaced by another crypto, AAVE also called Aave coin (new).

Barely 6 months after introducing LEND, Aave upgraded its protocol to focus on safety through decentralization, what they termed “Aavenomics”. In light of the change, Aave introduced their new Aave token, AAVE as the new governance token of the Aave protocol in July of 2020.

The names here can be a bit confusing as both coins are called “Aave coin”. To be very clear; LEND is the old Aave coin introduced in January of 2020 and AAVE is the new Aave coin Introduced in July of 2020.

The ratio of migration is 100 LEND for 1 AAVE.

The benefits of holding the AAVE token are: 

  • The right to continue voting on governance updates in the Aave protocol.
  • The ability to participate in Aave’s liquidity mining program and earn rewards.
  • The right to stake within Aave’s safety module and earn safety incentives.

LEND coin is phasing out

The official decision to completely take out LEND and migrate to AAVE was reached on 2nd October 2020, after overwhelming protocol votes in favor of the migration.

LEND remains active to current users to close down loans before it is completely phased out.

On August 14th, AAVE introduced Version 2 (V2) of the AAVE token which also allows those holding LEND as collateral to migrate.

Binance (one of the top LEND trading platforms) suspended all LEND withdrawals and deposits as of 11th October 2020 and began the AAVE  swapping process. Most other exchanges have followed suit giving LEND little use except as a means to buy AAVE.

LEND coin price history: Why did LEND coin go up in value?

Since LEND went live under Aave in January, it experienced 1,600% growth, reaching a price of $0.31 in July 2020. By November 2020, the price was at $0.534 and is now at $2.78 in 2021 according to CoinGecko.

LEND experienced 1,600% growth shortly after its launch on1st January 2020
LEND experienced 1,600% growth shortly after its launch on1st January 2020
(source: pixabay.com)

As mentioned earlier, some of the possible reasons for the price hike were:

  • The introduction of flash loans (uncollateralized loans) on Aave. Flash loans are a unique tool made possible by smart contracts on the blockchain. They let you take out an uncollateralized crypto loan and repay it in the same transaction.
  • Going live on its mainnet. Aave reported over $2.5 million in deposits in its protocol on the 15th January, one week after it went live on its mainnet.  Mainnet launches in crypto, put simply, are good signs of a project’s legitimacy.
  • Credit delegation. Another groundbreaking feature that gained lots of popularity on Aave was credit delegation. Here, an investor deposits stablecoins and delegates borrowing rights to another lender. Since the investor bears most of the credit risk, they get to charge a higher interest rate. 
  • The launch of YAM finance on 11th August. Those who wanted to obtain YAM could either buy it on UniSwap or provide any of eight ETH-based crypto assets (LEND included) into YAM and receive YAM overtime.
  • A lot of speculation. Lots of short-term traders flooded into Aave based on hype alone leading to about a 50% increase in price a month according to Coindesk.

LEND coin investing: Is LEND coin a good investment?

You’ll not find any platforms at the moment to invest in LEND coin since it is on its way out of the market. You can, however, invest its replacement, AAVE.

So, is AAVE a sustainable investment? Here are some of the reasons why it could be:

  • There’s actual demand for its products

Aave has introduced many unique features, differentiating itself from other DeFi platforms.

Products such as flash loans, interest rate switching, and credit delegation have and are still attracting many investors to the Aave platform.

  • There’s potential for growth 

Since Aave is still young and crypto is only growing, any major player has a chance to shine. Aave

One of its recent developments, the introduction of the Aave 2 protocol, allows you to trade collateral, decreasing liquidations on the platform. The protocol also accepts loan repayments using collateral.

How to buy LEND Coin 

Since LEND is phasing out, you will not find a platform that’s selling the token. You can, however, buy the new AAVE token in the following ways:

  • Trade major cryptos like BTC, ETH, and XRP for AAVE on major exchanges

Exchanges like Binance or OKEx offer trading pairs for AAVE.

  • Buy AAVE using FIAT 

Some platforms let you buy Aave using your credit card, PayPal, or even bank balance. Coinbase and OKEx currently accept FIAT payments for AAVE.

  • Take a loan against your crypto to buy AAVE

If you do not have cash or don’t feel like selling your crypto investment you may want to look at taking out a loan against your crypto

MyConstant lets you take out crypto-backed USD loans in AAVE within seconds. We offer loans against 70 types of crypto supported on MyConstant (including AAVE). Loan periods ranges from 1-3 months at an interest rate of between 6% APR and 7% APR

MyConstant stores your collateral securely in a cold wallet until you repay your loan. And we have 24/7 customer service available online or on the phone. Come check us out and get a free account set up in minutes.

You can take out a crypto-backed USD loan to buy AAVE
You can take out a crypto-backed USD loan to buy AAVE on MyConstant

Where to store LEND coin

Again, you’ll no longer have access to LEND but you can still invest in the new AAVE governance token. Since AAVE is an Ethereum based token, you can store it in any ETH compatible wallet including:

  • Trezor
  • BRD Wallet
  • Ledger Nano S
  • MetaMask
  • MyEtherWallet
  • Ethereum Wallet
  • Trust Wallet

Will the AAVE token be your next investment?

Aave is one of the DeFi platforms that has experienced the fastest growth in the industry, and the new AAVE coin may very well eclipse LEND in the next year or two.

Remember, however, that crypto investments can be very risky. Do your analysis and diversify your investment to increase your chances of making a profit. 

And if you want to start holding AAVE without selling your other cryptos, consider getting an AAVE loan against your crypto today.

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