We're in the phase of the market where there's a lot of retail inbounds but not enough education about the Ethereum ecosystem and DeFi.
So, let's break down the basics of some of the top protocols.
First on deck: Aave (@AaveAave), an Ethereum-based money market protocol.
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TL;DR: Aave is a protocol through which any user anywhere in the world can take decentralized loans by collateralizing their assets.
Aave also allows those will idle assets to earn a relatively safe return on capital from lenders, whose rates are determined by a curve.
1/ For years, most crypto assets had no indirect or direct utility.
Users would hold BTC, ETH, and other assets (including many ERC-20 tokens) with no expectation of a native yield or dividends.
ETH, for instance, was long just an asset for transaction fees, as was Bitcoin.
2/ If users wanted to borrow against their assets, they were relegated to centralized platforms—which were few and far between years ago.
3/ Aave, formerly ETHLend, is a protocol allowing users the ability to lend and borrow on-chain, without KYC and untransparent fees.
Users can deposit a variety of assets as collateral, then use that collateral as ammo to borrow other assets to be used in DeFi or beyond.
