Aave
Aave is an open-source, decentralized finance protocol renowned for building innovative Web3 products on blockchain technology. It serves as a peer-to-peer lending platform that allows users to borrow, lend, and earn interest on crypto assets without a middleman. Its features and architecture have helped bridge traditional finance with crypto markets, offering institutional and retail participants a scalable, non-custodial way to earn yields or access liquidity. Originally launched as ETHLend in 2017, the protocol rebranded to Aave and became one of the earliest widely adopted DeFi applications. Today, Aave is one of the largest DeFi protocols by total value locked (TVL), operating across 12+ networks and handling billions of dollars in weekly transaction volume.
ABOUT AAVE
Aave is one of the largest and most widely used decentralized liquidity protocols in the world.
Built on the Ethereum blockchain, Aave is a non-custodial money market platform that enables users to lend, borrow, and earn interest on crypto assets without intermediaries.
By leveraging smart contracts, Aave delivers a transparent, efficient, and secure alternative to traditional financial systems.
Through its multi-chain deployment and substantial total value locked (TVL), Aave has become a top-tier decentralized finance (DeFi) lending protocol and a core infrastructure provider for the global Web3 ecosystem.
Aave is also home to GHO, the protocol’s native decentralized, over-collateralized stablecoin. GHO is designed to maintain stability while remaining fully integrated into Aave’s liquidity pools, reinforcing the protocol’s role as a foundational layer of the DeFi economy.
PROTOCOL FEATURES & USE CASES
Lending and Borrowing – Users can supply digital assets to liquidity pools and earn interest or borrow assets by posting over-collateralized collateral, ensuring security and liquidity efficiency.
Interest Earning – Lenders earn variable or stable interest rates depending on market conditions, offering flexibility for both conservative and yield-seeking investors.
Collateral Swapping and Rate Switching – Borrowers can switch between interest rate types or swap collateral assets to optimize borrowing costs and manage risk more effectively.
Flash Loans – Aave pioneered the concept of flash loans, which allow users to borrow assets instantly without collateral, provided the loan is repaid within a single blockchain transaction — unlocking new possibilities for arbitrage, refinancing, and complex on-chain strategies.
Cross-Chain Expansion – Aave supports assets and liquidity across multiple blockchains and layer-2 networks, including Ethereum, Arbitrum, Polygon, and Avalanche, expanding access and enhancing interoperability across the DeFi landscape.
Governance and Token Utility – The native AAVE token gives holders the power to participate in decentralized governance, propose and vote on protocol upgrades, and earn rewards through staking in the Safety Module, a system designed to enhance protocol resilience and community engagement.