OKOX Classroom is in session, understand in a second: What is AAVE introduced by OKX on X LAYER: 1️⃣ Introduction to AAVE, Aave is a decentralized finance protocol (commonly known as DeFi), built on public chains like Ethereum. Simply put, AAVE is like a bank that provides users with deposits (depositing coins to earn interest) and withdrawals (collateralizing coins to obtain loans). ❓ So how does AAVE do this? 2️⃣ AAVE's lending mechanism relies on liquidity pools and over-collateralization. 1) A liquidity pool, as the name suggests, is an on-chain bank where users deposit their coins into AAVE to earn interest. 2) The over-collateralization mechanism in decentralized lending protocols like AAVE means that borrowers are anonymous and there is no credit rating system like traditional banks. To prevent borrowers from "not repaying," AAVE requires: The value of the collateralized assets must be greater than the value of the borrowed assets. 🙋♂️ For example, if I collateralize 1000...
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