AAVE is the native token of the decentralized finance (DeFi) protocol of the same name.. Despite the crypto market's impressive rise in recent months, it is still trading -87% below the all-time high reached in May 2021.
Large-scale price drawdowns often cause newcomers to panic and hastily sell tokens. However, experienced traders regard such events as an opportunity to form a reliable medium- or long-term portfolio and purchase the coins they are interested in at a discount.
Let's figure out how much you need to invest in AAVE now to become a millionaire during the bull run.
What is Aave
Aave is a DeFi lending protocol that allows you to lend and borrow crypto assets using variable and stable interest rates using 20 different assets as collateral.
The project was created in 2017 and was called Ethland. Aave in its current form launched in 2020 – now the third version of the platform is available to users, which supports many networks, including Ethereum, Avalanche, Polygon, Optimism, Arbitrum, Fantom and Harmony.
The protocol works based on the economics of excess collateral. To borrow cryptocurrency, the user must deposit tokens whose total value exceeds the cost of the loan and pay an interest rate that is determined by the supply and demand for the borrowed asset.
Source: Coingecko
At the time of writing, AAVE is ranked 78th in the top 100 cryptocurrencies, with a market capitalization of approximately $1.27 billion.
How much AAVE do you need to buy to become a millionaire?
To calculate the number of tokens you need to buy to become a millionaire when AAVE returns to its all-time high, you can use the following formula:
Number of tokens = Target amount / Expected future price,
Where:
Target amount: $1 million Expected future price: All-time high: $661.69
Thus, to see a round sum of $1 million in your account, you need to purchase approximately 1,509 tokens. At the current price of $85.78, the coins would be worth $129,442.
However, it should be understood that the crypto market can be extremely volatile and subject to the influence of “black swans”.. The calculations provided are based solely on current data and assumptions.. Always remember to adhere to risk and money management and only trade with money that you can afford to lose.