Aave (AAVE) has been one of the most successful decentralized finance (DeFi) projects, offering users the ability to lend and borrow cryptocurrencies. However, there is a new contender in the lending marketplace that could challenge Aave’s dominance with its new approach to asset-backed lending.
Introduction to Aave and its Success in the DeFi Space
Aave is a decentralized lending platform that allows users to borrow and lend digital assets. Aave is based on a peer-to-peer marketplace model and facilitates borrowing without having to go through an intermediary.
For borrowers, Aave allows them to obtain a loan quickly by providing collateral in the form of crypto. For lenders, Aave allows them to make passive income from their assets. Thanks to its simplicity and ease of use, this cryptocurrency has become one of the most popular DeFi projects on the Ethereum blockchain, with more than $5 billion worth of assets locked in it.
One of the key innovations behind Aave is the introduction of “flash loans,” which enable users to borrow funds without collateral, as long as the loan is repaid within the same transaction. This has made the platform even more attractive to borrowers and has contributed to Aave’s success in the DeFi space.
The 2021 bull run saw Aave pump from $50 to a peak of $666 in just five months, making it one of the top gainers in the crypto space. However, the price of Aave (AAVE) has since fallen by 89.56% to a price of $69.72 at the time of writing.
Market analysts foresee the price of Aave (AAVE) to continue to range sideways between $50 and $90 for the foreseeable future. A breach of $90 would likely result in Aave quickly pumping to the next resistance level of $120, with further gains expected during a crypto-wide bull run.
What Is the New Altcoin that Could Challenge Aave
The new altcoin in the DeFi space is called Collateral Network (COLT). It’s a decentralized lending platform similar to Aave but with some key differences — Collateral Network enables individuals to use their off-chain physical assets as collateral to obtain crypto loans
Collateral Network will enable users to unlock the liquidity of physical assets — such as gold, luxury watches, and fine art — without having to go through a broker or a custodian. This brings much needed liquidity to assets that do hold their value well but lack liquidity in the traditional lending space.
The tokenization of assets means that a pool of lenders can join and fund a single loan, which opens the lending industry to anyone, regardless of their net worth. And offers the opportunity for people of all backgrounds to make a steady source of passive income from fixed interest rates.
Collateral Network also utilizes a system of smart contracts to automate the entire loan process from start to finish, reducing costs and making access to loans more accessible. With Collateral Network, no longer do borrowers have to deal with complex paperwork and long waiting times.
This unique lending protocol has been gaining traction and generate a huge buzz among experts. As the first platform to offer this service on a decentralized basis and given that the traditional lending industry is worth over $500 billions a year, the growth potential of the COLT token is huge.
Currently, in the early stages of the presale, COLT is available at a price of $0.014 per token. Analysts are expecting further gains to $0.35 when the token lists on major exchanges.
Find out more about the Collateral Network presale here:
Website: https://www.collateralnetwork.io/
Presale: https://app.collateralnetwork.io/register
Telegram: https://t.me/collateralnwk
Twitter: https://twitter.com/Collateralnwk