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Aave is a decentralized money market and financial protocol running on Ethereum. It allows users to lend and borrow various digital assets from altcoins to stablecoins, without involving any centralized intermediaries. AAVE is the native token for the protocol.

AAVE has a total supply of 16 million tokens, out of which roughly 13 million are in market circulation. The protocol’s founding team owns the remaining three million tokens.  As of May 2022, Aave has a market capitalization of $1.59 billion. 

Basically, AAVE token has two use cases:

• Governance – Users can stake AAVE tokens to decide the protocol’s future by participating in its distributed voting mechanism.  
• Security Module – Aave has a unique security framework where users can earn around 7% yield by staking the tokens. However, the protocol slashes the staked tokens up to 30% in case of liquidity crises. 

Aave is a system of lending pools where smart contracts aggregate deposits from multiple liquidity providers. While the lenders earn interest on their assets, borrowers can acquire loans from these pools. The protocol utilizes two token types for its lending-borrowing process: 

• aTokens provide lenders with a proof-of-deposit, letting them collect interests.
• AAVE tokens incentivize lenders and liquidity providers.

Aave lets users borrow without collateral using Flash Loans. In simple terms, these transactions involve the following steps:

• the borrower takes a loan; 
• they use it to purchase an asset; 
• they sell the purchased asset; 
• they return the original amount to the pool. 

Flash Loans occur in 13-second intervals, which is equal to the block time of Ethereum. 

Aave’s journey began in 2017. The project was called ETHLend when Stani Kulechov launched the initial coin offering (ICO) in November 2017. Although ETHLend introduced a novel concept, its native LEND token lost traction during the 2018 bear market. 

ETHLend’s failure was mainly due to two reasons. One, it faced severe liquidity crises. Two, it couldn’t connect loan requests and offers efficiently. This motivated the team to rethink and redesign the product completely, relaunching it as Aave in January 2020. 

Aave v2 was launched in August 2020. Its mainnet went live in December that year. The updated version implemented several enhancements to the protocol’s flexibility and capital efficiency and introduced a collateral exchange feature through an upgraded flash-loan system. 

In March 2022, Aave launched its much-awaited v3, with improved capital efficiency, safety, decentralization, and user experience. The major purpose of this upgrade was to provide better returns to liquidity providers. Portal was also implemented, enabling the protocol to facilitate lending-borrowing across all blockchains. 

Aave prioritizes security above everything else. The team performs continuous testing and auditing. Moreover, the protocol’s open-source code is available for community-driven regulation while a $250,000 prize fund incentivizes bug reporting. There’s also a dedicated blog informing users about the protocol’s security upgrades.

To optimize security, though, users must also exercise caution and adopt safe practices. Most hackers and online frauds target individuals rather than protocols and platforms. Online crypto wallets or hot wallets are particularly vulnerable when it comes to compromising private keys.

Thus, using cold (hardware) wallets is advisable for optimal security. They store private keys offline, putting them at a safe distance from hackers. Ledger’s hardware wallets serve this purpose well and secures AAVE for its users.

Aave (AAVE) is available for purchase on multiple cryptocurrency exchanges globally. But this method poses security and ownership concerns. You don’t own the private keys of centralized wallets and must rely completely on the platform’s infrastructure. 

Ledger Live solves this problem. It enables you to simultaneously purchase and transfer AAVE to your Ledger hardware wallet. You have complete control of your private keys at all times. And naturally, this is the most secure way of buying AAVE.

You can even use your PayPal account or debit/credit cards to purchase AAVE on Ledger. And the process is very simple:

1. Get a Ledger hardware wallet. 
2. Download Ledger Live on a web or mobile device. 
3. Set up Ledger Live. 
4. Connect the Ledger app with the Ledger hardware wallet.
5. Start buying AAVE using Ledger Live.