Invest in Aave – How to Invest in Aave For Beginners
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Launched by Stani Kulechov in 2017, Aave was initially known as ETHLend. However, the protocol adopted the name ‘Aave’ in September 2018. The platform is a decentralized finance (Defi) protocol designed to help users lend and borrow cryptocurrency seamlessly without needing to go through a third-party.
In this guide, we have discussed the steps involved when learning how to invest in Aave in the US. We also explore the best Aave brokers to consider and the risks and potential rewards to think about before investing.
Table of Contents
#1 Broker to Invest in Aave – eToro
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How to Invest in Aave – Choose a Broker
There are many platforms in the cryptocurrency market with which you can invest in Aave. However, if you want to buy the token in the US, these are the brokers that should be on your list.
- eToro – Overall Best Broker to Invest in Aave in the US
- Coinbase – Beginner-Friendly Broker to Invest in Aave
- Binance – Crypto Exchange with a US-Dedicated Site to Invest in Aave
- Kraken – Great Crypto Exchange to Invest in Aave
We have pre-vetted all these Aave brokers and you’ll find our full review as you scroll down.
How to Invest in Aave – A Quick Guide For 2021
If you have a sufficient understanding of how the cryptocurrency industry operates, then a quickfire walkthrough is enough for you to invest in Aave. Therefore, we will provide you with a mini-tutorial through which you can invest in Aave in under five minutes!
- Step 1: Open an Account with eToro – We evaluated numerous brokers, but eToro stands out. This is because the platform offers a low-cost, heavily regulated, and user-friendly service. For just $25, you can start to invest in Aave on this broker. Get started by visiting the website and clicking the ‘Join Now’ button.
- Step 2: Upload Your ID – You will be unable to invest in Aave on eToro until you’ve provided the broker with a valid ID. As a platform regulated by the SEC, eToro is mandated to comply with KYC laws. Therefore, you must verify your identity before the broker grants you access to all its features.
- Step 3: Add Funds – When you’re investing in Aave on eToro, you can start with just $25. But first, you must deposit a minimum of $50 into your account through a debit/credit card or online banking.
- Step 4: Invest in Aave – After completing the above steps, you can then proceed to buy the token. Here, you simply need to enter ‘Aave’ into the search box. Click on ‘Trade’ and you’ll be taken to the order page to enter your stake and invest in Aave.
Investing in Aave through eToro is super convenient since you can store your tokens in the broker’s in-built wallet. This way, when you’re ready to cash out your Aave investment, you can create a sell order directly from your portfolio.
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
Where to Buy Aave – Full Broker Reviews
As stated earlier, the cryptocurrency market contains many brokers that’ll allow you to invest in Aave. However, in this section, we have provided a full review of these brokers after we assessed their services in terms of fee policy, user-friendliness, listed markets, and of course — regulation.
With this in mind, here are the top brokers worthy of consideration when you want to invest in Aave in the US.
1. eToro – Best Broker to Invest in Aave in the US
We consider eToro the best broker to invest in Aave for many stand-out reasons. The first notable feature of the broker is that the platform is regulated by the SEC and registered with FINRA. The broker is also regulated by ASIC and the FCA – which govern the financial markets in Australia and the UK respectively. Essentially, the presence of these regulators behind the broker means that you can invest in Aave in a secure environment – since there’s protection on various fronts.
Furthermore, since eToro has the approval of leading financial authorities, you can make payments on the broker with US dollars. To this end, the broker provides you with numerous payment options including debit/credit cards, online banking, and ACH. Using any of these methods, you can start investing in Aave from $25, meaning you can start your trading journey with minimal risks. The broker also allows you to deposit funds into your account without incurring any fee ($50 minimum), making eToro a cost-effective platform to invest in Aave.
Furthermore, eToro makes it convenient to diversify your Aave investment, as you can access more than 30 other cryptocurrency markets. These include Litecoin, Chainlink, Yearn.finance, Bitcoin, Ripple, Ethereum, and more. When investing in any of these tokens, you do so on a spread-only basis, meaning you don’t incur variable commissions that you will find with most other brokers. This makes eToro a suitable broker for you to invest in Aave in the US if you’re on a budget. Additionally, the broker also has a simple user interface that makes it super convenient for you to buy the token.
Furthermore, eToro provides you with tools for research through which you can gain more insights about Aave and make a more informed buying decision. eToro also has a copy trading feature that allows you to invest passively. When you’re copy trading, you simply need to choose a trader and eToro will mirror the future positions of that individual in your own portfolio. Essentially, this provides you with a way to leverage the experience of other investors to trade cryptocurrencies.
Getting started on eToro is fast and easy. You simply need to visit the broker’s website and complete the registration steps. After signing up, you can start investing in Aave, alongside any of the other markets available on eToro. Another feature we consider valuable about the broker is the in-built wallet. With this wallet, you have a storage option for your Aave tokens, saving you from the trouble of looking for a credible external place to keep your tokens safely.
Pros
- Invest in cryptocurrencies on a spread-only basis
- Minimum investment per trade from just $25
- Supports debit/credit cards, online banking, and local bank transfers
- Regulated by the SEC, FCA, CySEC, and ASIC
- Minimum deposit of $50 and no transaction fees for US citizens
- Used by over 20 million people
- Perfect for beginners
- Social and copy trading tools
Cons
- Perhaps too basic for technical traders
- No support for MT4 or MT5
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
2. Coinbase – Beginner-Friendly Broker to Invest in Aave
Coinbase allows you to invest in Aave in a simple and straightforward manner. A notable factor that makes the broker stand out in the cryptocurrency market is its ease of use. Therefore, if you are new to the cryptocurrency space and looking for a seamless platform to start investing in Aave, Coinbase is worth exploring. You can begin your investment journey with the broker by creating an account and providing a valid ID for identity verification.
After opening an account, you can proceed to invest in Aave using your debit/credit card. This is a swift way to buy Aave tokens — as the purchased coins will reflect in your portfolio after completing the transaction. However, while this method is fast and allows you to complete your investment quickly, Coinbase charges you nearly 4% of the purchase amount. Essentially, a $200 investment in Aave means you’ll only receive $192 worth of tokens. Therefore, if you’re a newbie in the cryptocurrency industry, you must be aware of this feature when contemplating the broker.
However, if you are unbothered about this broker’s fee policy, Coinbase is a great place with impressive features that make it easy to invest in Aave. Another thing we like about the broker is that nearly 98% of your tokens are stored in cold wallets. This means the tokens will remain offline, keeping them out of hackers’ reach. The broker’s impressive security protocol also includes a two-factor authentication process for all account holders to verify each person’s identity.
Pros
- One of the most popular cryptocurrency exchanges
- More than 68 million users
- Supports instant debit card purchases
- Dozens of digital currencies to choose from
- Institutional-grade security practices
Cons
- Debit card deposits are expensive at 3.99%
- You will pay a standard trading commission of 1.49%
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
3. Binance – Crypto Exchange With a US-Dedicated Site to Invest in Aave
When it comes to trading volumes, Binance is the largest cryptocurrency exchange globally. The broker has continued to remain prominent in the cryptocurrency scene ever since it was launched in 2017 — with the exchange now home to over 100 million users. Furthermore, among the brokers we examined, Binance stands out for having a platform dedicated to American investors. The Binance US website offers you up to 50 markets in which you can invest, including Aave.
If you want to use this platform to invest in Aave, you must start by opening an account and verifying your identity. For this purpose, you’ll have to provide the platform with a valid ID. Additionally, when you invest in Aave using your debit/credit card, the exchange will charge you a competitive fee of 0.5%. The same thing applies to all of the markets listed by the exchange including EOS, Cosmos, Dogecoin, Chainlink. Bitcoin, BNB, and more.
However, the first challenge with Binance US is that the platform doesn’t support as many tokens as its global exchange. Nonetheless, if you’re fine with the 50+ tokens listed on the platform, Binance US is still a great exchange for asset diversity. Another drawback with this exchange is that its user interface is not ideal for beginners. Meaning, if you’re just getting started in the cryptocurrency space, you might find it a bit difficult to navigate your way across the required investment steps.
Pros
- Facilitates billions of dollars in daily trading volume
- Supports hundreds of digital asset pairs
- Near-instant deposits via debit/credit card
- Trading commission starts at just 0.1% per slide
- Offers crypto savings accounts
- Ideal for both beginners and experienced traders alike
Cons
- Not all supported cryptocurrencies can be purchased with a debit/credit card
- No e-wallet deposits or withdrawals
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
4. Kraken – Great Exchange to Invest in Aave
Kraken is a credible cryptocurrency exchange that has established its presence in various jurisdictions – including the US. If you’re looking to invest in Aave alongside other tokens, Kraken is potentially worth exploring — as the exchange comprises fiat-to-crypto pairs and crypto-crosses. Additionally, the exchange allows you to make deposits into your account through different payment options – including ACH. The exchange is also relatively easy to use — so you can navigate the required steps to invest in Aave seamlessly.
However, upon further scrutiny, there are certain features of Kraken you should contemplate before deciding on whether to use the exchange. First, if you have a 30-day trading volume that falls under $50,000, you’ll be paying 0.26% in commissions. While the lowest commission you can pay on the platform is 0.10%, this requires you to have traded a minimum of $10 million within the previous 30 days. Clearly, this exchange’s fee structure is high, especially when you compare it against a platform like eToro – where you invest in Aave on a spread-only basis.
Furthermore, after purchasing Aave tokens on Kraken, you’ll need to transfer your coins to an external wallet. This is because the exchange isn’t designed with a secure in-built wallet for you to store your tokens. As you can imagine, the process of transferring your tokens back and forth can be frustrating. Also, your tokens might become susceptible to remote attacks during this process. Therefore, if you want to invest in Aave in a burden-free manner, Kraken might not be your best option.
Pros
- Popular cryptocurrency exchange and broker
- Great selection of cryptocurrencies
- Supports both crypto-cross and fiat-to-crypto pairs
- Accepts debit/credit cards and bank transfers
- Offers complex crypto instruments for experienced traders
Cons
- Not all US states are supported
- Fees are somewhat pricey
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
How to Invest in Aave – Detailed & Explained in Full
Now, we will explain in detail the process of how to invest in Aave in the US. From our market research, eToro is the best broker to use for this purpose if you’re a beginner. This is because the broker offers low fees, is user-friendly, and is regulated by the SEC. With just $25, you can begin to invest in Aave through eToro.
Step 1: Open an Account to Invest in Aave
If you want to invest in Aave using eToro, you must start by creating an account. You can do this by visiting the broker’s website and clicking ‘Join Now’ to initiate the process. After that, follow the instructions on the screen until you’re done signing up. During this process, you’ll be required to provide some personal information such as your full name, social security number, and more.
eToro will also require you to answer some questions concerning your investment experience. The broker will use your answers here to understand the right set of trading services you require.
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
Step 2: Provide ID
To be able to invest in Aave using eToro, you must provide a valid ID to remove the restrictions on your account. For this purpose, you’ll need to submit an ID issued by the government.
This can be your passport or driver’s license. In the same manner, you’ll have to provide a document that validates your home address. A good example is a utility bill or bank statement. After fulfilling the KYC requirements, eToro will verify your account in under two minutes.
Step 3: Make a Deposit
You’ll have to fund your account before you can invest in Aave. As a US client, you can deposit funds from just $50. You can do this through your debit/credit card — which is the fastest method for you to make payments. Some other payment options you can use are online banking and ACH.
When using any of the above payment methods, you won’t incur any deposit fee. We consider this an impressive perk because you might incur fees of up to 4-5% at other cryptocurrency brokers.
Step 4: Search for Aave
After funding your account, the next thing to do is to search for the token. Here, all you need to do is to input ‘Aave’ into the search box to find the coin.
You’ll find the token in the result tab. Click on ‘Trade’ and the broker will take you to the next page.
Step 5: Invest in Aave
Once you get to the order page, all you have to do is to enter your stake. Meaning, if you’re looking to invest $100 in Aave, simply input that amount into the relevant box.
Once you’ve entered your stake, click on ‘Open Trade’ and eToro will execute your order. There you have it! You have just successfully invested in Aave in the US. In even better news, you can use the broker’s in-built wallet to store your tokens until you are ready to cash out.
How to Sell Aave
When you invest in Aave, you do so hoping that the token’s price will increase. If Aave’s price does increase, you’ll make a profit on your investment. For instance, suppose you invest $1,000 in Aave, and the market increases by 20%. In this case, your investment would now be worth $1,200.
However, you cannot realize this gain until you’ve sold your tokens. This makes it important to understand how to sell Aave. Fortunately, the process is simple and you can complete it within seconds.
- The first thing you need to do is to visit your portfolio on eToro.
- Once you’re there, click on ‘Sell.’ Choose a market order and confirm the sale.
- Consequently, the broker will execute your sale at the best available price.
- Once the tokens are sold, your cash balance will be updated.
Now, you can choose to reinvest your funds or you can elect to withdraw your money back to your bank account.
Ways to Invest in Aave
Now that you understand how to invest in Aave, the next thing is to know the different ways you can buy the token. Essentially, you can buy either invest in Aave using an online broker or a cryptocurrency exchange.
Investors find both options appealing for different reasons. Therefore, we will explain these two ways and show you the preferrable option for investing in Aave.
Invest in Aave through Online Broker
Although there are many online brokers, eToro stands out in the cryptocurrency market. The broker has approval from both FINRA and the SEC.
- Meaning, a broker like eToro is credible — so when you invest using the platform, you’re doing so in a secure manner.
- Since the broker is authorized by the relevant financial bodies, you can invest in Aave with US dollars.
- This also means you can use your debit/credit card — the fastest means to deposit funds.
- Furthermore, a licensed broker like eToro is mandated to disclose its fee policy.
One more thing that makes eToro a suitable broker is the platform’s in-built wallet. This makes it seamless to buy, store, and sell your Aave tokens, making the broker super convenient for beginners.
Invest in Aave Through Cryptocurrency Exchange
Alternatively, some investors like to use cryptocurrency exchanges for buying Aave. In this instance, you’ll be buying the token from other traders instead of the provider itself. Many investors use cryptocurrency exchanges because they often charge extremely low commissions. Additionally, you might also gain access to huge levels of liquidity.
However, the major drawback of these exchanges is that they are unregulated. First, this means that you enjoy no regulatory protection over your funds — as you cannot ascertain the legitimacy of the provider.
Secondly, since these platforms are not recognized by financial authorities (such as the SEC), you cannot use your debit/credit card to make payments. Meaning, you’ll have to buy Aave by depositing another cryptocurrency token. This process can be challenging for beginners.
Should I Invest in Aave?
In an extremely speculative market like that of cryptocurrency, it’s only right to have some doubts when you’re looking to invest in Aave. Digital currencies are volatile, meaning their prices can rise or fall within seconds.
Considering this, we would advise you thoroughly research Aave before investing in the token. To help you through this phase, we have discussed some key features worthy of consideration.
Democratizes the Lending Space
An important feature of Aave is that the protocol seeks to make everyone profit from lending their assets. In the traditional financing scene, the bank lends out your funds and earns interest on your money. Aave seeks to redefine this by ensuring that anyone can lend out their assets to other users while securing their interest.
The interest generated over this lending process will be credited to your wallet. This is a notable contribution of Aave to the decentralized finance (Defi) ecosystem, making it a top-rated leading protocol in this industry. Consequently, this use case has the potential to impact the Aave token. Therefore, you might want to contemplate this when researching the project.
Open-Source Protocol
Defi is characterized by openness and Aave advances this objective. The protocol is open-source, meaning all users can access its functionalities and take advantage of its many use cases. Moreover, investors generally prefer open-source protocols — as these networks tend to be more secure and community-oriented.
With an open-source protocol, you get to understand the nature of activities that could go on in the network. This way, you can ascertain your risks and determine the best ways to manage them. Additionally, since open-source protocols are more receptive to new users, this feature can impact the value of the Aave token.
Flash Loans
Flash loans remain a significant feature introduced by Aave into the cryptocurrency scene. With this product, users can take quick loans without collateralizing any of their assets. These loans are useful for arbitrage trading opportunities.
- Additionally, you can use these loans to fund purchases on other lending protocols with the aim of making a quick profit.
- Due to the impressive use case of this feature, it has grown to become a core component of the Aave protocol.
- Notably, these loans are to be paid back before the next Ethereum mining block and there’s a 0.3% fee charged for the service.
Nonetheless, this is a feature worthy of being explored when researching the Aave project. Learning more about this feature will help you understand how it might impact the value of the token in the market.
Community Governance
Aave enjoys a large community of users who actively contribute to the development of the protocol. Often, investors consider the community behind a token before deciding to buy the coin or otherwise. In this regard, Aave seems to tick the box, as the protocol was designed to be community-oriented.
Therefore, if you enjoy having a stake in a token’s protocol, Aave might be a worthy consideration. Token holders get to vote on proposals and contribute to key issues affecting the platform.
Additionally, Aave is a non-custodial network, meaning the protocol doesn’t hold your assets directly. Since you continue to own your tokens and can save them in a reliable wallet, you get to have some peace of mind while investing in Aave.
What are the Risks of Investing in Aave?
As an investor, you must consider the risks that come with buying Aave. When you become aware of the risks, you can contemplate them when creating an investment plan.
Below, we consider the pressing risks you should know of before you proceed to invest in Aave.
- The first notable issue has to do with over-collateralization. A significant drawback with the Aave protocol is that the network requires borrowers to collateralize assets that are worth more than the amount they are looking to borrow.
- If this issue is not addressed quickly, it can potentially reduce the rate at which users patronize the protocol, which consequently will affect the value of the Aave token.
- Furthermore, another risk you need to prepare for is market volatility. When you invest in Aave, you should expect that the token’s price can increase or drop abruptly.
- If you choose to invest in Aave using a cryptocurrency exchange, you will not enjoy regulatory protection over your funds. In this instance, you can withdraw your tokens into an external wallet. However, this means that you need to know about crypto wallet security and how to safeguard your private keys.
Concerning the above, there are some ways through which you can hedge your risks. With the strategies below, you can reduce your risk exposure and mitigate your losses when investing in Aave.
- First, you can choose to diversify your Aave investment by purchasing other tokens. On eToro, you have over 30 other tokens from which you can choose your next investment.
- Concerning market volatility, you can hedge your risks here by investing small amounts on a regular basis.
- This way, you’ll focus more on the long-term possibilities of Aave and not short-term pricing swings.
Furthermore, we would suggest that you choose a regulated broker to invest in eToro. This way, you will sit within the remit of the regulator’s safety net. A good example here is eToro — a broker that is authorized and regulated by the SEC.
How Much Does it Cost to Invest in Aave?
If you’re investing in Aave on a budget, we would suggest that you choose a low-cost broker. This way, you won’t have to incur variable commissions when buying and selling the Aave token.
- When you choose eToro, you get to add funds to your account for free irrespective of the payment method you choose.
- This is a great perk — because, with many brokers, you might pay up to 5% for making a deposit into your account.
- eToro also allows you to start investing in Aave from just $25, making the broker suitable if you’re on a budget.
To further put this issue of cost in perspective, consider the trading commissions and fees you might pay on your chosen broker.
- For instance, eToro grants you access to a tight spread starting from just 0.75%.
- On the flip side, when you invest in Aave using a broker like Coinbase, you’ll be charged nearly 4% in commission when opting for a debit or credit card payment.
- The disparity between these two fee structures indicates the importance of choosing the right broker when you want to invest in Aave.
Ultimately, the best brokers are those that are completely transparent and without hidden fees. Therefore, always consider brokers that make their fee policy easily accessible.
How to Invest in Aave? – Conclusion
In this How to Invest in Aave Guide, we have discussed the relevant aspects you need to understand before buying the token. This includes the most suitable broker to use and the registration steps involved. Once you choose a broker like eToro, you can invest in Aave from the comfort of your home — as the platform is simple to use and comes with investment tools that make the process seamless.
eToro is also regulated by the SEC and grants you access to 30 other crypto markets in which you can invest alongside Aave. All you have to do is thoroughly research the project, consider the risks involved, and create an investment plan that will guide your decisions in the cryptocurrency market.
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FAQs
How to invest in Aave?
Best place to invest in Aave?
Should I buy Aave?
How can I safely invest in Aave?
How do I cash out my Aave investment?
