A new research survey published by crypto price tracker CoinGecko on Tuesday revealed the countries most curious about cryptocurrency since the crypto market crash.
The research examined Google Trends data of search terms frequently used by people interested in cryptocurrency.
CoinGecko then combined such terms to give each English-speaking country a ‘total search score’ to identify which nations have been the most interested in cryptocurrency since the market crash in April this year.
The study ranks Nigeria as the most curious nation about cryptocurrency since April this year. According to the CoinGecko study, Nigeria garnered a total search score of 371, and that made it at the top of the list of nations with the most interest in digital assets.
Coupled with its huge population, Nigeria garnered the highest search levels for the phrases like ‘cryptocurrency’, ‘invest in crypto’ and ‘buy crypto’ worldwide. Furthermore, the population of Nigeria’s search for the cryptocurrency ‘Solana’ emerged as the third highest in the world.
CoinGecko survey then ranked the United Arab Emirates (UAE) as the second country with the most interest in cryptocurrency since the market crash in April this year. The Arab nation in Asia garnered a total search score of 270. The UAE has the second-highest proportion of its population searching for both the phrases ‘cryptocurrency’ and ‘invest in crypto’. And that placed it second in the ranking, according to CoinGecko.
The research placed Singapore third. The Southeast Asian country has the third-highest level of searches for the term ‘buy crypto’ and is the nation searching for the cryptocurrency ‘Ethereum’ the most worldwide. The survey gave Singapore a total search score of 261.
The United Kingdom was ranked fifth overall. The research gave the UK a total search score of 198.
According to the study, the UK has the sixth-highest number of searches for the phrase ‘buy crypto’ and the third-highest number of searches for ‘invest in crypto’. The study also identified Bitcoin, Ethereum, and Polygon as all trending cryptocurrencies in the United Kingdom.
Besides that, CoinGecko research placed the United States as the twelfth country most interested in cryptocurrency. The survey identified that the US has the tenth-highest search levels for the term ‘buy crypto’ and is the sixth country most interested in the cryptocurrency ‘Solana’. The country had a total search score of 157. Just like the UK, Bitcoin, Ethereum and Polygon are all trending cryptocurrencies in the US right now, according to the study.
Developing countries offer fertile ground for crypto adoption
The most interesting thing in the new CoinGecko study is the emergence of developing nations (Nigeria, the United Araba Emirates, Singapore, Georgia, and Lebanon) in the list of countries with the most curiosity about cryptocurrency in the world.
The study demonstrates that people and businesses in developing nations like Nigeria, the United Araba Emirates, and Lebanon, among others, are gaining increasing interest in investing and trading cryptocurrencies. Such interests show that crypto adoption is significantly increasing in developing nations.
In developed countries, cryptocurrencies are viewed by many in the financial world with suspicion and as a speculative and highly volatile fad that can only end badly. Regulators in the US and Europe have issued stern warnings about the dangers of trading cryptocurrencies.
But in developing nations, there are signals that cryptocurrency is quietly developing deeper roots. Especially in nations that have a history of financial instability or where there are high barriers to accessing traditional financial products such as bank accounts. Cryptocurrency use is rapidly becoming a daily habit of life in such countries.
Are you looking for a way to earn interest on your crypto savings or borrow against your assets? That’s what the Ethereum-based AAVE platform is all about.
In this article we’re going to do a brief overview of AAVE and what you can do with it. We’re also going to walk you through how to get started using it. Lastly, we’ll go over some of the behind the scenes technical details of the platform including the risks you’ll need to consider before signing up.
What is AAVE?
AAVE is an open-source DeFi platform that allows users to earn interest on deposits and borrow against them. There are no KYC checks, geographic restrictions or other limitations on who can join. Currently, the platform boasts of having over $3 billion in deposits.
One important difference with AAVE and other competitors is that this platform is non-custodial. In short, that means your deposits are always in your control. This is good because it means no single person or corporation can restrict your access to your deposits.
If the Swiss company behind AAVE were to disappear tomorrow, your funds would still be available. Non-custodial platforms do have some downsides though. If your funds are lost for any reason, AAVE can’t help you recover them. If there is a successful hack and funds are stolen, non-custodial platforms typically don’t have insurance. AAVE does offer a sort of pseudo insurance which we will get to later.
AAVE is built on Ethereum. That means it’s based on one of the most battle-proven crypto networks out there. However, the platform currently only supports a handful of ERC-20 tokens for earning interest and borrowing against.
That means popular non-Ethereum assets like Litecoin and XMR aren’t supported. AAVE supports most ERC-20 stablecoins (USDT, USDC, TUSD, DAI to name a few) as well as several other popular Ethereum-based tokens such as Basic Attention Token or BAT, 0x Coin or ZRX, and Maker or MKR. The platform even indirectly supports bitcoin via the Ethereum-based Wrapped Bitcoin or WBTC.
Making Your First Deposit With AAVE
Getting started with AAVE is pretty simple, but could be a little daunting if you are new to crypto apps. To begin, visit AAVE’s official website – AAVE.com. Next, click on Enter app which will bring you to a version select screen. Unless you have a reason to, go ahead and choose the latest version. At publishing time, the latest is version 2.
Next, you can decide whether you’d like to associate a wallet so you can deposit and withdraw through it, or you can continue without associating a specific wallet. Currently, AAVE supports browser wallets like MetaMask, hardware wallets like the Ledger, and even popular custodial wallets like Coinbase. Under normal circumstances and with a proper security setup, unlocking a wallet with AAVE won’t expose you to much direct risk.
Once you are logged in, the next step is to make your first deposit so you can either start earning interest or setup the collateral to take out a loan. On the top menu you can choose the deposit tab. This will lead you to the deposit screen which will show you what the current interest rates are in annual percentage yield, or APY.
Interest rates change all the time, but during our investigation we found that stablecoins had the highest interest rates by far. For example, USDC and TUSD were both hovering around 12%. ETH, on the other hand, was trailing behind at just under 1%. Some assets even had 0% interest rates. Comparing this to other DeFi services, 12% interest for stablecoins is very competitive.
Interest rates for borrowing were also incredibly diverse. During our investigation, we found interest rates ranging from 0.16% for UNI all the way up to 25.44% for USDC, variable APR. Just as with deposits, these rates will change all the time depending on market conditions. AAVE also allows user to choose (and switch back and forth between) variable and stable APR’s. Currently, the stable APR options were even higher, with USDC coming in at a whopping 30.44%. Not all assets had a stable APR option.
AAVE explains the difference between stable and variable rates on their official website with the following:
The stable rate, as its name indicates, will remain pretty stable and its the best option to plan how much interest you will have to pay. The variable rate will change over the time and could be the optimal rate depending on market conditions. You can switch between the stable and variable rate at any time through your dashboard.
Regardless of this being a crypto loan or a traditional loan, a 25.44% to 30.44% interest rate is quite high. In fact, it’s on par with most high-interest credit cards and short term traditional finance loans. It’s important to remember, however, that the crypto economy is currently experiencing a bull market at press time. This will definitely influence interest rates both on the borrowing and lending sides. Unfortunately, AAVE doesn’t seem to populate any data under it’s historical rates section for us to compare to previous time periods.
One final thing to remember when borrowing with AAVE is that the company behind it does collect an origination fee with each loan. Specifically, the groups advises that “a 0.00001% of the loan amount is collected on loan origination”.
The AAVE Token and Staking Rewards
Another way to earn with AAVE is by owning and staking the platform’s native asset. Owners of the AAVE asset can deposit them into what the platform calls their “safety module”. The safety module is used “as a mitigation tool in case of a shortfall event”. In simple terms, if something bad happens to the market where depositors could lose some or all of their deposits, the contents of the safety module can be used to repay depositors.
As compensation for taking on the risk, deposits made into the safety module will earn a regular return called a “safety incentive”. According to stakingrewards.com, the safety incentive rate is 4.51% at press time. At current prices that would mean $0.75 per month income, per AAVE staked.
The AAVE asset has seen sharp price increases since it’s introduction from $20 in November 2020 to the current price of over $180 in January 2021.
Advanced Features of AAVE
One thing AAVE offers that some other DeFi platforms don’t is the ability to tokenize and trade or sell your interest-earning deposit directly. This works through a process called tokenization.
According to the white paper, deposits are converted into a “corresponding amount of derivative tokens” that “map 1:1 [to] the underlying assets”. These derivative tokens are called aTokens. Depositors can choose to either redeem their interest-earning aTokens for their original asset plus interest, or they can directly sell or trade aTokens on any market that supports them.
Another feature that will interest developers is what the group calls Flash Loans. These are micro-term loans that last only the length of a single Ethereum block. They allow smart contracts to take out loans without putting up collateral as long as the loan is returned with the one block window. You can read more about Flash Loans here.
Balancing the Risks Versus the Rewards
AAVE has a lot of features to offer both those seeking loans and interest income. The platform is also wide open to anyone and has zero restrictions on who can join. However, as with all DeFi platforms and apps, participating in AAVE isn’t risk-free. The main potential risks with using AAVE is that funds could be lost due to a hack, a major black swan market event, or a technical glitch stemming from smart contracts.
So far none of these seem to have happened. What’s more, the platform does have it’s safety module program that encourages individuals to essentially insure at least some assets against loss. In the end, you’ll need to carefully weigh both the opportunities and risks yourself.
Is AAVE a solid way to earn and borrow, or is it too risky? Let us know your thoughts in the comments below.