June 19, 2021

AAVE Clone script: Create an Exceptional Defi Lending Protocol like AAVE

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Decentralization has become the talk of the decade. Since the last decade were entirely about the arrival of digital finance and cryptocurrency, there is no wonder that the crypto sector had introduced an update by introducing further decentralization in their field of development. 

You may think that decentralization had been introduced in the cryptocurrency exchange itself and what good or advantage will the new Defi protocols bring to the technological society. To be clear, the defi protocols are here not only to make the crypto or any other financial service empowering, it is here to make all the business verticals completely decentralized by connecting them through a chain of digital evolution.

Talking about this, AAVE had attracted a considerable amount of people to their service because of their defi lending protocol. Are they significant? How will you benefit from your business by starting a Defi lending protocol like AAVE?

This blog is all about this. Come, let us dive into the topic and learn some new things about the defi technology through AAVE.

What is AAVE?

While talking about decentralized exchanges, one of the most popular ones is the IDEX, which is a decentralized finance platform that is built on the ethereum blockchain. Only IDEX kind of Dapp platform can help us to create an open lending protocol like AAVE.  Now it is time to know about AAVE.

AAVE is a decentralized money market protocol that helps traders to trade or exchange cryptocurrencies on honest means by providing stable and affordable and acceptable interest rates. Through this, the traders can earn interests through staking or pooling their cryptocurrencies by the open-source lending protocol. In laymen’s terms, you can lend your cryptocurrencies to the trader and earn interest in either AAVE coins.

AAVE is one of the best lending and borrowing platform for traders and entrepreneurs. As it is a defi platform, there are options for crowdfunding for capital generation, but it is highly focused on lending. They allow liquidity from the depositors and transfer as loans to the borrowers for a specific rate of interest. 

Another interesting thing to know is that you will not require any KYC verification or AML verification to either lend or borrow cryptocurrencies using AAVE. AAVE makes it easy for the users to gather the investment and helps the depositors to earn interest without difficulty by setting free of all the bank loans and high rates of interest. 

What is AAVE clone script?

AAVE Clone script is a non-custodial open-source defi platform similar to AAVE that helps your borrowers to get the necessary investment from the borrowers themselves thereby helping a managed resource of crypto flow in the crypto market. They have several features and benefits of AAVE without deteriorating the original software. 

It is 100% customizable software that you can modify or change the development criteria and add or remove extra features or security options to make it more secure and reliable as per your business requirements. Now let us learn about how this AAVE like open-source decentralized finance borrowing and lending platform works

How does AAVE clone script work?

Deposit and Earn 

Depositing in the AAVE clone is very easy. The user has to register his account and transfer a deposit amount to the crypto wallet integrated with the clone platform. Once the transaction is confirmed, the account will reflect your deposit which will start generating interest for your cryptocurrencies. There is no limit for either borrowing or lending crypto tokens in the AAVE clone script.

The aave token holders can earn consistent profits and interest through interest rate payment on loans and flash loans. The former is the interest that the borrower will pay to the depositor for lending the cryptocurrencies for his loans. The latter is a flash loan that the depositor will earn as a part of the flash loan fee based on the volume of the holdings.

Borrow tokens

You can either sell your assets and earn revenue for your capital or you can borrow. It is best recommended to borrow than selling the assets. Borrowing saves your tokens from selling and if the value rises, it will further save your profit and you can obtain your liquidity without selling off your assets. And borrowing facilitates your stand as you can send your interest rate and save your tokens also.

Swapping

You can swap your AAVE token even if you have considered it as collateral to another token. This will help you in various ways. For instance, if you have got any debts/loans this will help you to repay your loans in an effective way.

Liquidations

This happens when your debt value is not so good to manage. That means, if your debt value goes below the value of 1, then there would be a liquidation factor. In a normal crypto trading process, you will have to either add value to your trade by investing further. In terms of AAVE token-based clone script, your user will pay and balance the liquidation by which 50% of the borrower’s amount is repaid and the remaining would be taken from the liquidation fee on the collateral. The liquidation fee would depend on the amount of collateral that you have invested in the site.

Flash loans

These are the loans that allow the developers to get any required amount of loans without the need to integrate their collateral for the loan. But the liquidity should be returned to the protocol. 

Migration

The AAVE token allows the migration of LEND token to the AAVE token as a factor of Aavenomics. This migration is with respect to the aave governance and comes under the aave safety module.

Wrapping it up

These are some of the unique moving points of AAVE clone script. WeAlwin Technologies is the best DeFi development company that provides unique AAVE token-like development solutions as per your business requirement. We have a team of development experts and designers who have a piece of expert knowledge in crafting competitive software for your crypto business. Launch your crypto business with an open-source defi lending protocol like AAVE and earn consistent profits.

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