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Coin Bureau on $AAVE: ‘Fair Valuation Could Be Well Over $1,000’


www.cryptoglobe.com 14 January 2022 21:46, UTC
Reading time: ~3 m

Recently, the popular psuedonymous host of Coin Bureau explained why they feel that $AAVE, which is the governance token of non-custodial liquidity protocol Aave is severely undervalued.

What Is Aave?

Aave is “a decentralised non-custodial liquidity market protocol where users can participate as depositors or borrowers.” Depositors “provide liquidity to the market to earn a passive income,” while “borrowers are able to borrow in an overcollateralised (perpetually) or undercollateralised (one-block liquidity) fashion.”

$AAVE is “used to vote and decide on the outcome of Aave Improvement Proposals (AIPs).” Also, $AAVE can be “staked within the protocol Safety Module to provide security/insurance to the protocol/depositors” with stakers able to “earn staking rewards and fees from the protocol.”

Coin Bureau’s Analysis of Aave

Earlier today, the Coin Bureau host released a YouTube video that took a closer look at Aave.

According to a report by The Daily Hodl, here are a few highlights of his comments about Aave and its governance token $AAVE:

The AAVE token has performed poorly and is barely up 2x since the start of 2021. Just about every DeFi token has been struggling to keep up with the rest of the crypto market since it crashed in May last year. This seems to be because the hype has moved into NFTs [non-fungible tokens]. This is something that [AAVE founder and CEO] Stani Kulechov acknowledged in an October panel discussion.

He basically said that while DeFi is very exciting and often offers lots of gains, it’s just too complex for the average person to wrap their head around. Meanwhile, NFTs provide comparable levels of excitement and gains, and they’re a concept that almost anyone can understand...

The most important upcoming milestone is the launch Aave V3, which will introduce multiple new features to the Aave protocol...

Aave’s social media platform will be built in such a way that your social media profile, as well as any other content you create on Aave’s platform, will be portable to any other decentralized social media platforms that emerge on Ethereum, effectively making censorship impossible.

In terms of a specific release date, Aave said its social media platform is ‘coming soon’ and it’s been slow to roll out because the team has been mostly focused on Aave v3 for the last few months… Stani believes decentralized social media will be the next hot niche after NFTs...

With a market cap of just $3 billion, this means that AAVE could be undervalued by a factor of five, and its fair valuation could be well over $1,000.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.


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