Explained: The Aavegotchi GHST Token

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Playable assets that act as collateral on DeFi networks

The Aavegotchi GHST token is a DeFi-focused non-fungible token (NFT) that runs on the Aave protocol. Aavegotchis are basically game avatars that can be used as DeFi collateral to earn staking rewards. Similar to CryptoKitties, the tokens have differentiating features such as body color and personality and being a staked asset, its owner can liquidate the tokens at any time. Unfortunately, liquidating the NFT means the Aavegotchi is also gone forever.

The project was due to launch on January 4th, 2021, but was pushed to mid-March due to high transaction fees on the Ethereum blockchain. Now it runs on the Ethereum Layer-2 solution Polygon.

Source: CoinMarketCap

In the first 12 weeks of 2021, the price of the GHST token has increased 165% from $0.55 to $1.46. Two reasons for the GHST price breakout to new all-time highs in March 2021 include its recent migration to the Polygon network, the successful completion of its first NFT sale which sold out in minutes. They also announced a partnership with the American rapper Lil Pump, known for his song ‘Gucci Gang’, while Aavegotchi uses ‘Gotchi Gang’. You see why this is a nice marketing move. 

What is an Aavegotchi?

Aavegotchis are playable assets that also act as collateral on DeFi networks. To interact with one, DeFi users need to stake select tokens known as aTokens such as LINK (aLINK) and USDC (aUSDC) into the digital collectible. 

Apart from earning interest from staked tokens, holders of the platform’s native currency, GHST, also receive rewards. Furthermore, Aavegotchis are tradable on OpenSea and other NFT marketplaces meaning that those with valuable Aavegiotchis can realize the value.

Aavegotchi is banking on a system it calls rarity farming. Basically, the rarer the Avegotchi, the higher the price it should fetch on the market. Moreover, the platform shares part of its revenue with leading rarity farmers in a bid to gain user retention. 

The top exchanges for trading in Aavegotchi GHST tokens are currently Binance and Uniswap. Exchanges usually offer several pairing options, giving token owners the chance to choose a pairing based on currencies they already possess. Below are the top 3 trading pairs for GHST.

Source: CoinMarketCap

Through integration with Aave and its aTokens, NFTs on the Aavegotchi platform create unique interest-bearing representations of funds supplied to the Aave protocol. Future drops, low transaction fees, and an expanding NFT store demonstrate that there is a healthy demand for GHST, and this is likely to grow as the platform expands.

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