Where’s the cheapest place to buy AAVE in the UK with GBP?
In 2022, there are more places than ever before where you can buy AAVE (and other cryptocurrencies) directly with GBP.
In this quick guide, I’m going to run through the best options you have available.
Intro: Cheapest Way to Buy AAVE in the UK
Here are the best places where you can buy AAVE in the UK.
|Kraken||UK Bank Transfer||Up to 0.26%|
|Coinbase (Advanced)||UK Bank Transfer||Up to 0.60%|
|CoinJar||UK Bank Transfer||1%|
|CoinJar||Credit & Debit Card||2%|
|Gemini||UK Bank Transfer||2.00%|
|Crypto.com||Credit & Debit Card||2.99%+|
|BC Bitcoin||UK Bank Transfer||5%|
Let’s dive into these more.
Best Ways to Buy AAVE in the UK
1. Popular Cryptocurrency Exchanges
With each of them, you’re able to deposit GBP with a UK bank transfer (for FREE). Each of them utilises the Faster Payments Service (FPS) too, which means that your transfers should usually be credited quickly (10-15 minutes).
Here’s what you’ll pay on these two cryptocurrency exchanges:
To get these fees on Coinbase, you’ll need to toggle the Advanced Trade dashboard. In a desktop browser, this can be down by:
- Selecting ‘Trade’ in the sidebar.
- Clicking the ‘Advanced’ tab that’s shown at the top-left of the page.
- Finding the AAVE-GBP trading pair.
If you just use Coinbase’s standard interface, you will be charged much higher fees.
You can buy AAVE directly with GBP on Kraken and through Coinbase’s Advanced Trade interface.
Both of these cryptocurrency exchanges have about the same trading volume for AAVE (see here).
CoinJar allows you to buy AAVE and a growing number of other cryptocurrencies in the UK.
Unlike cryptocurrency exchanges, CoinJar has an intuitive and easy-to-use mobile app (and web interface) which makes it simple to buy, sell, store, and send AAVE and 20+ other cryptocurrencies. This includes Ripple (XRP), Chainlink (LINK), Compound (COMP), and more.
You can deposit GBP with a UK bank transfer on CoinJar. This is processed via the Faster Payments Service (FPS), which means that GBP you send over to them should be credited quickly (within minutes for me) after your initial deposit.
Alternatively, you can instantly buy any supported cryptocurrency on CoinJar with a credit or debit card.
You’ll be charged a fixed fee of 1% when you buy AAVE on CoinJar using GBP deposited into your wallet with a UK bank transfer.
If you choose to use a debit or credit card, you’ll be charged a fixed fee of 2%. This makes CoinJar one of the cheapest places in the UK to buy cryptocurrencies with a debit card.
Crypto.com is one of the cheapest ways to buy AAVE and more than 150 other cryptocurrencies with a credit or debit card.
If you’re from the UK, you’ll be charged a fixed fee of 2.99% when you buy AAVE using a card on Crypto.com. While it advertises “true cost”, I’ve found that the prices you’re quoted will be more than 1% above the exchange rate.
I was previously quite impressed with what Crypto.com had to offer (especially the crypto debit card). But it’s nowhere near as good as it was.
What is AAVE (AAVE)?
AAVE is a Decentralized Finance (DeFi) network that allows users to borrow and lend cryptocurrency.
The project began in 2017 under the name ETHLend and worked by matching borrowers with lenders on a 1:1 basis. However, the process wasn’t efficient and often left borrowers waiting for the right lender to appear.
ETHLend also suffered from liquidity issues as the amount of crypto available to lend wasn’t always sufficient to service all loan requests.
Because of these issues, ETHLend was rebranded as AAVE in 2018 and rebuilt on top of the Ethereum blockchain. Instead of using the old model of matching borrowers directly with lenders, lenders now deposited funds into liquidity pools, which other users could then borrow from via smart contracts.
In exchange for providing cryptocurrency to the liquidity pool, lenders receive interest on their digital assets. To qualify for a loan, borrowers must provide collateral to secure their debt.
Unlike a standard car or home loan, all loans made on AAVE are over-collateralized, meaning borrowers must provide collateral of greater value than that of their loan. For example, if you wish to borrow £100 worth of Dai (DAI) you might be required to provide £120 worth of Bitcoin (BTC).
Why would anyone do this?
First off, AAVE doesn’t have a KYC process, meaning the identity of any given borrower is unknown. Should a borrower fail to repay their debt, there is no mechanism through which the platform could recuperate the outstanding balance, giving lenders little incentive to participate.
Secondly, depending on market conditions, this type of loan can work out well. For example, say you deposit £120 worth of Ethereum (ETH) as collateral to borrow £100 worth of Dai (DAI). If your deposited Ethereum increases in price and is now worth £150, that is the amount you will receive when you pay back the £100 of Dai (DAI).
This can also backfire. If your collateral loses too much value it will be liquidated to ensure the lender gets paid. On AAVE, the lender always gets paid.
To view what coins are supported on AAVE, and their current APY, visit here.
AAVE is a feature-rich platform and it can be confusing at first. For a more detailed summary of how AAVE works, I recommend watching the following video.
A liquidity pool is a collection of locked cryptocurrencies that allows for trades between buyers and sellers on DeFi platforms.
To learn more about liquidity pools and why they’re important to DeFi, check out this.
Best Aave (AAVE) Wallets
To keep your AAVE safe, it’s highly recommended that they be moved to a wallet. Luckily, because AAVE is an ERC-20 token, there are several quality options.
Here are some hot wallet options:
- MetaMask: One of the most popular browser-based wallets. Supports a large number of cryptocurrencies although blockchain networks must be imported manually.
- Atomic Wallet: Supports over 300 cryptocurrencies and several staking options. Lightweight and easy to use.
- Exodus Wallet: User-friendly and compatible with most leading hardware wallets. Supports over 100 cryptocurrencies.
- Coinbase Wallet: Available on both desktop and mobile. Supports over 500 cryptocurrencies and no Coinbase account is required.
For those who feel more comfortable storing their AAVE tokens on a hardware wallet, you can store it using the following wallets:
- Trezor: AAVE tokens can be added to a Trezor cold wallet using Trezor Suite – the desktop companion application. Trezor supports over 1,000 cryptocurrencies and is one of the most popular hardware wallets around.
- Ledger Nano S: Provides access to swap functionality and several DeFi apps. Over 1,000 cryptocurrencies are supported.
- Ledger Nano X: Similar to the Nano S but comes with Bluetooth capabilities and other more advanced features. Nearly double the price of the Nano S
Thanks for Reading!
Thanks for checking out this guide about how to buy AAVE in the UK!
Check out my other guides while you’re here: