If you're following the evolution of the cryptocurrency sector, you've likely encountered the term Decentralized Finance, or DeFi. This represents one of the first concrete applications to emerge from blockchain technology, largely powered by smart contracts.
The Aave protocol was founded in November 2017 by Stani Kulechov. Initially named "ETHLend," the Swiss-based company behind the project eventually created Aave, and the protocol inherited this new name.
In essence, Aave is a non-custodial, open-source, decentralized lending and borrowing protocol. This means you interact with the protocol using your own private key, which you never surrender. Its core functions allow users to:
- Deposit crypto-assets into a liquidity pool in exchange for a variable yield.
- Borrow crypto-assets in an over-collateralized manner (you lock up more assets than you borrow) for a variable fee.
All protocol rules are implemented in smart contracts, and governance is handled in a decentralized way through a DAO (Decentralized Autonomous Organization). The admin keys for the Aave governance have been abandoned, meaning the protocol's future evolution depends solely on decentralized voting by the DAO.
The AAVE token is the governance token of the protocol, granting holders voting rights within the DAO.
Understanding the AAVE Token
To participate in the Aave ecosystem or simply invest in its governance token, you will need to acquire AAVE tokens. You have two primary options:
- Buy AAVE on a decentralized exchange (DEX): This requires you to already possess cryptocurrencies and have a basic understanding of the necessary tools like web3 wallets.
- Use a centralized exchange (CEX): This is the simplest method for most beginners, which we will detail in this guide.
Choosing a reliable service provider can be challenging due to the sheer number of exchanges, some of which have closed under dubious circumstances. Let's explore the platforms that offer AAVE and the steps to acquire it.
A Step-by-Step Guide to Purchasing AAVE
The process of buying AAVE on a major exchange is generally consistent and straightforward. You will only need a few minutes to register on a platform like Binance and complete your first purchase. Standard registration requires an email address and identity verification.
👉 Explore secure crypto trading platforms
Key Steps Summarized:
- Select a reputable centralized exchange that supports AAVE trading.
- Register an account by providing an email and completing the identity verification (KYC) process.
- Fund your account with fiat currency (like EUR or USD) to prepare for your purchase.
- Execute the purchase of AAVE through the exchange's trading interface.
- Choose a storage solution for your AAVE tokens, such as leaving them on the exchange or transferring them to a private wallet for enhanced security.
Evaluating Top Platforms for Buying AAVE
Our selection of platforms is based on evaluating key criteria like security, ease of use, fee structures, historical performance, and trading volume. This list is subjective and may change over time.
| Platform | Minimum Deposit | Key Advantage | Key Drawback |
|---|---|---|---|
| Binance | 15 euros | Largest liquidity, vast array of crypto assets | Some financial products are unavailable for French users |
| Bitvavo | 5 euros | User-friendly interface, competitive fees | No leverage trading options |
| Coinbase | Varies | Proven track record, strong regulatory compliance | Higher fees for credit card purchases |
| eToro | Varies | Social trading features, variety of assets | High fee structure for crypto transactions |
How to Buy AAVE on Binance
Binance is the unambiguous market leader in terms of trading volume and user base. The platform offers a wide range of services suitable for both beginners and professional traders.
- Create an Account: Visit the Binance homepage and click "Register" in the top right corner.
- Verify Your Identity: Click "Verify Now" and provide the required information: country of residence, nationality, full name, and date of birth. You will need your smartphone to scan a QR code and complete the identity document verification via the Binance app.
- Deposit Funds: Once verified, navigate to "Buy Crypto" on the homepage. You can choose to buy directly with a credit card (fast but with ~1.8% fees) or fund your EUR account via a SEPA bank transfer (slower but significantly cheaper).
- Buy AAVE: After your account is funded, search for "AAVE" in the markets section, specify the amount you wish to purchase, and confirm the trade.
Our View on Binance: Binance is highly liquid, offers a great variety of assets including AAVE, and has an intuitive user interface. However, some products are restricted in certain regions, and credit card transactions incur higher fees.
How to Buy AAVE on Bitvavo
Bitvavo has established itself as a leading platform for buying cryptocurrency with euros.
- Registration and Verification: Go to the Bitvavo website, click "Sign Up," and complete the form with your personal details. Confirm your email and answer the investor profile questionnaire. Verify your identity using the Onfido system by photographing your ID and completing a facial recognition video.
- Fund Your Account: Activate two-factor authentication (2FA). Then, click "Deposit," select "SEPA Bank Transfer," and use the provided payment reference for your transfer. Other deposit methods like credit card become available after your first SEPA transfer.
- Purchase AAVE: Once funds are received, search for "AAVE" on your dashboard, click on the asset, specify the amount in euros or AAVE, and validate your purchase.
Our View on Bitvavo: Bitvavo boasts a user-friendly interface ideal for beginners, competitive transaction fees (max 0.25%), and a wide selection of 290 cryptocurrencies. All trading pairs are against the euro for clarity. It is a registered Digital Asset Service Provider (DASP) with the AMF, ensuring regulatory compliance. Limitations include a lack of crypto/stablecoin trading pairs and no leverage options.
Different Methods for Buying AAVE
Credit/Debit Card Purchase
Using a credit or debit card is often the simplest and fastest method, but also the most expensive. It is beneficial for taking advantage of sudden market dips without waiting for bank transfers, though it typically incurs fees of a few percentage points.
SEPA Bank Transfer
A SEPA bank transfer is a top-choice method for funding your exchange account due to minimal or non-existent fees. While standard transfers can take a few days, instant SEPA transfers are supported by some platforms to reduce this delay.
Using Other Cryptocurrencies
You can acquire AAVE by swapping other cryptocurrencies you own. This can be done on both centralized (CEX) and decentralized (DEX) exchanges.
What to Do After Buying AAVE?
After your purchase, you have several options:
- Hot Storage on the Exchange: The least cumbersome method, but it carries the potential risk of total fund loss if the exchange encounters financial difficulties.
- Transfer to a Cold Wallet: The most recommended storage method. Sending your AAVE to a private wallet where you control the private keys can be done from any platform for a small withdrawal fee.
- Staking AAVE: You can immobilize your AAVE in the Aave protocol's "safety module" to generate a passive income.
- Using AAVE: Swap your AAVE for other digital assets or use the voting rights associated with your tokens to participate in the protocol's governance.
Frequently Asked Questions
Is buying the AAVE token risky?
Exposure to AAVE inherently carries risk, as the project is only a few years old and the DeFi sector is still emerging. However, Aave remains the largest decentralized lending and borrowing platform currently.
Does the price of AAVE fluctuate significantly?
Yes. As with most crypto-assets, AAVE's price is subject to significant short-term volatility due to the developing nature of blockchain technology. There is always a risk of price collapse if the platform loses relevance.
How do I get started with AAVE?
Before any purchase, we recommend researching the real-world applications and value proposition of the Aave protocol and DeFi. Only invest once you are convinced of its long-term utility.
Can you buy AAVE anonymously?
It is increasingly difficult to buy AAVE without identity verification (KYC). While some platforms offer limited non-KYC purchases for other assets like ETH, you would then need to use a DEX to swap for AAVE.
Do you have to buy a whole AAVE token?
No. AAVE tokens are divisible, meaning you can buy fractions of a token, such as tenths or hundredths.
What is the best way to store AAVE securely?
For maximum security, transferring your AAVE tokens to a hardware wallet (cold storage) that you control is considered the best practice, as it removes the risk associated with leaving funds on an exchange.